Psychological Distance and Willingness to Pay for a Climate Change Fund: The Role of Environmental Knowledge in Japan

Katsuhito Nohara

No 89, TUPD Discussion Papers from Graduate School of Economics and Management, Tohoku University

Abstract: This study applies a partial proportional-odds model to examine whether people’s psychological distance from climate change changed during a period encompassing the unprecedented heat experienced in Japan in 2023 and 2024. It also investigates how psychological distance and environmental knowledge are associated with willingness to pay for climate change mitigation measures. The study draws on two repeated cross-sectional surveys using identical questionnaires administered to different respondents in 2022 and 2025. Propensity scores and overlap weighting were used to improve the comparability of the two survey samples by balancing observed differences in age, gender, and prefecture of residence. After this adjustment, respondents in 2025 were more likely than comparable respondents in 2022 to perceive climate change as psychologically proximate. Specifically, the predicted probability of reporting a high level of psychological proximity was approximately 13 percentage points higher in 2025. Although this difference cannot be attributed exclusively to the record-breaking heat experienced in 2023 and 2024, the findings suggest that the unprecedented heat may have contributed to making climate change appear more immediate and personally relevant. Furthermore, the contingent valuation analysis shows that the positive association between environmental knowledge and willingness to pay depends on psychological distance: greater environmental knowledge is associated with higher willingness to pay, particularly among individuals who perceive climate change as psychologically close. These findings provide important insights into the design and communication of climate policies.

Pages: 27 pages
Date: 2026-09
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https://hdl.handle.net/10097/0002008524

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Persistent link: https://EconPapers.repec.org/RePEc:toh:tupdaa:89

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