The role of loss aversion in shaping environmental relocation decisions

Jiakun Zheng () and Yanyin Li ()
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Jiakun Zheng: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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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.We thank Ling Zhou and one anonymous referee for constructive comments.

Keywords: Family ties; Status-quo bias; Loss aversion; Willingness to relocate (search for similar items in EconPapers)
Date: 2024-12-30
Note: View the original document on HAL open archive server: https://hal.science/hal-04991151v1
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Published in Economics Bulletin, 2024, 44 (4)

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