The Economics of Warm Glow: A Note on Consumer's Behaviour and Public Policy Implications

29 Pages Posted: 5 Oct 2004

See all articles by Paulo A. L. D. Nunes

Paulo A. L. D. Nunes

University of Padova - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF)

Laura Onofri

Fondazione Eni Enrico Mattei (FEEM)

Date Written: September 2004

Abstract

The paper focuses on the ongoing debate on non-market valuation, including the valuation environmental goods, and the opportunity to use contingent valuation for policy guidance. In fact, contingent valuation critics argue that reported willingness to pay answers do not reflect real economic preferences and, for this reason, should not be used in cost-benefit analysis The attempt to contravene such critique finds many supporters. This paper starts from the latter stream of research and adds two original contributions. First, it sheds light on the individual warm glow motivational profile, exploring the empirical relationship between individual's socio-economic characteristics and warm glow. Second, it discusses some implications of the presence of warm glow for public policy.

Keywords: Economic value, Contingent valuation, Willingness to pay, Latent factor, Consumer motivations, Warm glow, Ego driven warm glow, Social oriented warm glow, Public policy design

JEL Classification: D11, D12, Q26

Suggested Citation

Dias Nunes, Paulo Augusto and Onofri, Laura, The Economics of Warm Glow: A Note on Consumer's Behaviour and Public Policy Implications (September 2004). FEEM Working Paper No. 113.04, Available at SSRN: https://ssrn.com/abstract=593681 or http://dx.doi.org/10.2139/ssrn.593681

Paulo Augusto Dias Nunes (Contact Author)

University of Padova - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF) ( email )

Legnaro, Padova 35020
Italy

Laura Onofri

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

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