How Do Attitudes and Perceptions Affect Environmental Preferences?

Abstract

Environmental preferences or willingness to pay (WTP) values tend to be heterogeneous and evolving over time. Attitudes and related theories worked as an alternative observation scope to the more conventional sociodemographic characteristics, explaining preference heterogeneity in environmental economics. Perception as a concept, on the other hand, is too illusive to be exclusively examined so is better treated as an attitude. Although not popular in mainstream environmental economics, the research interest in the attitude–WTP relationship has continued since the late 1990s and has increased and been relatively steady between 2006 and 2020. According to the lessons from the established behavioral models, attitudes are normally categorized as either general or specific. General attitudes are situation-invariant and slow to change, whereas specific attitudes are situational and quick to change. The early pioneering studies of the attitude–WTP relationship used mostly ad hoc measures for environmental attitudes roughly from 1990, followed by the studies of more systematic representation roughly from 2000, and by those of hybrid models roughly from 2010. There were segmentation-based and parameterization-based approaches to incorporating attitudinal characteristics into valuation models. In particular, parameterization has appeared in three generations: indirect inclusion of indicators, sequential estimation using factor analysis, and integrated hybrid models. As future prospects, first, general environmental attitudes might play an important role in the coming decade because of their relative stability (i.e., situation invariant), comparability, and wide influence, determining environmental preferences and behaviors. Second, a potential difference between the segmentation-based and parameterization-based approaches requires further investigation. Third, the role of hybrid models and the payment parameter that is arbitrarily constrained demand more studies for accurate estimation of mean WTP values. The evolving nature of human preferences could be understood only when the observation scope for latent attitudes is enlightened enough to guide studies of environmental economics, to lead environmental policies, and to accomplish sustainable development.