How do people discount over spatial distance?

Lisa Bruttel and Ziemann Niklas ()
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Ziemann Niklas: 26583 University of Potsdam , Department of Economics and Social Sciences, August-Bebel-Str. 89, 14482, Potsdam, Germany

German Economic Review, 2023, vol. 24, issue 1, 33-67

Abstract: This paper studies how individuals discount the utility they derive from their provision of goods over spatial distance. In a controlled laboratory experiment in Germany, we elicit preferences for the provision of the same good at different locations. To isolate spatial preferences from any other direct value of the goods being close to the individual, we focus on goods with “existence value.” We find that individuals put special weight on the provision of these goods in their immediate vicinity. This “vicinity bias” represents a spatial analogy to the “present bias” in the time dimension.

Keywords: spatial discounting; existence value; charitable giving; experiment (search for similar items in EconPapers)
JEL-codes: C91 D90 H41 R12 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/ger-2021-0106

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