The Price of Breathing

by Anca Balietti, Angelika Budjan, and Tillmann Eymess

Guided by a theoretical framework, we study how perceived relative income affects preferences for public goods. In a randomized survey experiment, we inform respondents from India of their official income rank and elicit preferences for air quality, including actual contributions to environmental initiatives. Right-wing supporters withdraw contributions when perceived relative income increases. The effect coincides with diminished health concerns and lower intentions to utilize private protection measures against air pollution. In contrast, center-left supporters do not reduce contributions. A second survey experiment demonstrates the causality of the relationship using a novel treatment that exogenously shifts relative income perceptions.

Strategic Ignorance and Perceived Control 

by Anca Balietti, Angelika Budjan, Tillmann Eymess, and Alice Soldà

Information can trigger unpleasant emotions. As a result, individuals might be tempted to willfully ignore it. We experimentally investigate whether increasing perceived control can mitigate strategic ignorance. Participants from India were presented with a choice to receive information about the health risk associated with air pollution and later asked to recall it. We find that perceived control leads to a substantial improvement in information retention. Moreover, perceived control mostly benefits optimists, who show both a reduction in information avoidance and an increase in information retention. This latter result is confirmed with a US sample. A theoretical framework rationalizes these findings.

Who is involved?

• Jun. Prof. Dr. Anca Balietti (Heidelberg University)
• Dr. Tillmann Eymess (Heidelberg University)
• Dr. Angelika Budjan (University of Stuttgart)
• Dr. Alice Soldà (Ghent University)