Negative income shocks and the support of environmental policies - Insights from the COVID-19 pandemic

Andreas Löschel, Michael Price, Laura Razzolini () and Madeline Werthschulte

Framed Field Experiments from The Field Experiments Website

Abstract: This study explores whether negative income shocks from the COVID-19 pandemic affect the demand for environmental policy. By running a survey in Germany in May 2020, we show that there is a large and negative correlation between the COVID-19 income shocks and the willingness to support green policies. Importantly, this relation is separate from the effect of long-run income. Building on the first evidence, our study provides directions for future valuation studies. Specifically, our results provide a proof of concept that welfare analyses based on willingness-to-pay estimates to assess the benefits of an environmental good or the cost of an environmental damage may be downward biased if temporary changes in income are not considered.

Date: 2020
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Citations: View citations in EconPapers (2)

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Working Paper: Negative income shocks and the support of environmental policies: Insights from the COVID-19 pandemic (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:feb:framed:00710

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