On the Valuation of the Causes and Consequences of Environmental Damages : Evidence from a Field Experiment

Standard economic theory assumes that agents' valuation of economic outcomes is independent of the process via which these outcomes are produced. Yet Bulte, Gerking, List, and de Zeeuw (2005) found that causes in addition to outcomes matter in valuation. Using a field experiment I test whether drawing people's attention to the role they play in the process of environmental degradation affects their willingness to pay for mitigation. I do so by eliciting contributions to a reforestation program in an environmentally valuable area by including or omitting explicit information on one of the main causes of local forest degradation, timber harvesting – an activity the vast majority of my respondents are engaged in. I find that explicitly stating that logging is one of the main causes of deforestation increases respondents' willingness to pay. More interestingly, I find that this “responsibility effect” is sufficiently strong to eliminate free rider behavior