The relationship between climate protection activities, economic preferences, and life satisfaction: Empirical evidence for Germany

Abstract

Based on widely representative data for 1614 citizens in Germany, this paper empirically examines the relationship between different types of environmental protection activities and subjective well-being (SWB) in terms of life satisfaction by specifically considering the role of economic preferences for this relationship. With respect to pro-environmental behavior, we distinguish between stated environmental protection activities and revealed pro-environmental behavior in terms of climate protection activities, which are measured with an incentivized donation scheme. Our empirical analysis reveals that not only stated environmental protection activities (contributing more or less to climate protection), but also more reliable revealed climate protection activities are significantly positively correlated with life satisfaction. Furthermore, economic preferences play an important role since risk-taking preferences, patience, and trust are significantly positively correlated with life satisfaction. In particular, the estimated correlations between environmental protection activities and life satisfaction become weaker when economic preferences are included in the econometric analysis. These results strongly suggest omitted variable bias in cross-sectional econometric analyses of the relationship between pro-environmental behavior and SWB when economic preferences are not included as control variables. With respect to the distinction between different groups of (stated) environmental protection activities, our empirical analysis also shows that (electricity-related) direct climate protection activities and costly environmental protection activities are more positively correlated with life satisfaction than less costly or non-costly general environmental protection activities.