Do wealth levels affect the contribution to negative externalities?

Juan M. Benito-Ostolaza, Roberto Ezcurra and Nuria Osés-Eraso
Authors registered in the RePEc Author Service: Juan Miguel Benito Ostolaza

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 87, issue C

Abstract: This paper experimentally explores the link between poverty and decisions that lead environmental degradation. In the experiment, individuals with different wealth levels play a game that describes environmental degradation as a contribution to an activity that generates a negative externality. The experimental data show that wealth levels not related to the environment (exogenous poverty) play no significant role in environmental decisions. However, the variation in wealth as a consequence of the contribution to environmental degradation (endogenous poverty) affects the behavior of individuals, that enter a spiral of poverty and environmental degradation. These results suggest the existence of a poverty-environment trap.

Keywords: Environmental degradation; Exogenous poverty; Endogenous poverty; Negative externality; Experiment (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:87:y:2020:i:c:s2214804319304549

DOI: 10.1016/j.socec.2020.101579

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