The role of loss aversion in shaping environmental relocation decisions

Jiakun Zheng () and Yanyin Li ()
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Jiakun Zheng: Aix Marseille Univ, CNRS, AMSE, Centrale Marseille, Marseille, France.
Yanyin Li: School of Finance, Renmin University of China

Economics Bulletin, 2024, vol. 44, issue 4, 1263 - 1270

Abstract: This paper utilizes data from the 2017 China Household Finance Survey (CHFS) to examine the impact of loss aversion on individuals' willingness to relocate due to environmental concerns. We find that individuals who are more loss averse are less likely to consider moving, resulting in what is called the status-quo bias. In addition, we find that individuals with stronger family ties as measured by the number of siblings and higher household fixed assets are more susceptible to these effects, implying that they are more attached to their current place of residence and less likely to relocate.

Keywords: Loss aversion; Willingness to relocate; Family ties; Status-quo bias. (search for similar items in EconPapers)
JEL-codes: D1 Q5 (search for similar items in EconPapers)
Date: 2024-12-30
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