The Economics of Warm Glow: A Note on Consumer’s Behavior and Public Policy Implications
Paulo A.L.D. Nunes, Laura Onofri
Economic value,Contingent valuation,Willingness to pay; Latent factor,Consumer motivations,Warm glow,Ego driven warm glow,Social oriented warm glow,Public policy design
Climate Change and Sustainable Development
The paper focuses on the ongoing debate on non-market valuation, including the valuation of environmental goods, about the opportunity to use contingent valuation for policy guidance. Contingent valuation critics argue that reported willingness to pay answers do not reflect real economic preferences and, for this reason, should not be used in cost-benefit analysis. This paper focuses on warm glow, which is defined as the feeling of moral satisfaction generated by contributing. The purpose of this paper is twofold. First, it sheds light on the individual warm glow motivational profile, exploring the empirical relationship between individual’s socio-economic characteristics and warm glow. Second, it discusses some implications of the presence of warm glow for public policy.