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Working paper

Diesel or Petrol? Proenvironmental Preferences, Attitudes to Uncertainty and the Power of Money

SSRN.3516187, 2020
Vinogradov D., Elena Shadrina, Makhlouf Y.
People differently rank factors they see as important when making decisions with potential environmental impact. Both in a survey and theoretically, we investigate the relative importance of monetary and non-monetary factors and how and whether attitudes to uncertainty affect this ranking. Risk and ambiguity aversion explains the ranking of decision factors that involve uncertainty about future outcomes but often uncertainty is neglected: e.g. possible changes to standards and regulations are seen as a factor of uncertainty, while data manipulation by car manufacturers, as manifested in the recent Dieselgate scandal, is not seen as such. Responses in our sample overwhelmingly reject consumers’ indifference with respect to environmental issues, however when it comes to individual consumption choices, these are strongly dominated by monetary factors. Our data highlight an important role of institutions as collective commitment devices to help promote proenvironmental behaviour.