Friends of the Behavioral Economics Club, this week we present the paper “Social Preferences and Environmental Behavior: a Comparison of Self-Reported and Observed Behaviors” by Oliphant, Z.; Jaynes, C. M. and Moule, R. K. (2020), in which authors, using the behavioral economics’ perspective and games developed by it, study whether a relationship between our social preferences and our tendency to recycle exists.

That the Earth has limited resources is not new information for us. Neither is the fact that pursuing sustainability is a necessity in the modern society we live in.

But what is sustainability? The UN defines it as development that meets the needs of the present without compromising the ability of future generations to meet theirs.

Since the importance of this term has been recognized, many organizations have advocated implementing sustainable practices in an interdisciplinary economic, social and environmental setting. That is, there is a desire to “become green.”

Similarly, there has been a growing push for people, individually, to play a role in contributing to live in a more sustainable world.

Authors wonder if there is a way to study behaviors related to the environment, especially recycling, from the point of view of behavioral economics.

As it is a field with very little literature on the matter, they explored the possibility of establishing a relationship between social preferences, which are already being widely studied from behavioral economics, and the tendency of people to recycle or not.

They understand that both concepts can be related by the following idea. Classical economic theories of choice assume that individuals are interested in maximizing their benefits and minimizing expected costs, and act accordingly.

However, there are cases in which people deviate from the protection of their self-interest in ways that appear to demonstrate sincere concern for the well-being of others, or in other words, they have prosocial behaviors. For example, volunteering or donations.

These are altruistic behaviors that move away from the idea that the human being is selfish by nature, since they involve costs for the individual that are not necessary.

Taking these ideas into account, they wonder if it would also affect recycling, considering it is altruistic behavior.

On the other hand, authors investigate whether increasing the proximity and ease with which people can participate in pro-environmental behaviors, would influence and positively affect these behaviors.

For this objective, they organized an experiment in which 282 young university students participated.

At the beginning of this experiment, they were given questionnaires so that they made a self-report on their pro-environmental behaviors.

The experiment was based on playing two games commonly used in behavioral economics studies, called “ultimatum” and “dictator”. Two individuals are involved in both.

In the ultimatum game, one player has a certain amount of money and offers the other player part of it. If Player 2 rejects Player 1’s offer, they will both walk away with nothing.

In the dictator game, player 1 also offers a quantity of money to player 2, which must be accepted by the latter.

The results were interesting and surprised authors.

In the game of the ultimatum and the dictator, the majority of participants (59%) offered half of the total money that they imagined possessed. Only 3% of the sample did not offer any of their money to the second player.

An explanation for this can be altruism, but also, in the case of the ultimatum game, exists the idea that offering too little money could cause Player 2 to reject the offer and therefore both people would walk away with a total of 0.

On the other hand, the sample reported a high pro-environmental behavior in the self-reports, which suggested to the authors that they would recycle if they were given the opportunity to do so. When this opportunity was given, it was observed that 85% of the respondents did indeed recycle.

Regarding demographic factors and self-reports, it appears that men were significantly less likely to state that they act in an environmentally friendly way.

On the other hand, it was seen that, when participants had a container nearby where they could recycle, they did so without problems, so facilitating recycling would initially increase its practice.

The most important finding is that it seems that social preferences are not significantly linked to pro-environmental behaviors. That is, there is a lack of support that can be attributed to perceptions that the effectiveness of pro-environmental behaviors is weak and that respondents were skeptical about the willingness of others, or the community, to recycle.

One limitation would be that the experiment was carried out thanks to the participation of young university students and, therefore, they are not a reflection of the whole society.

Authors encourage those who create environmental policies to improve accessibility to recycling and coordinate their environmental sustainability efforts with the research conducted.

If you want to know more about Behavioral Economics and how to apply it to human behavior, take a look to our Certificate in Behavioral Economics, a formative program, in English or Spanish, 100% online and certified by Heritage University (USA). Now, with discounts for members of this club.


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