The Role of Willingness to Sacrifice for more Sustainable Lifestyles: A Prospect Theory Approach to Bridging the Green Gap

Abstract

This paper aims to examine individuals' willingness to make sacrifices in their pursuit of living more sustainable lifestyles. Furthermore, it explores how insights from these measures inform the design of incentives and policies to effectively bridge the gap between environmental intentions and actions. Utilizing Prospect Theory I explore how individuals perceive risks and rewards associated with pro-environmental actions—an area of study, rich with complexity. Based on a survey-based experiment involving students from Copenhagen Business School, I assess gains and losses, consider probability weightings, reference environmental concerns, and develop a sacrifice/reward matrix. This approach provides insights into 12 variables related to sustainable lifestyle scenarios, which could serve as the foundation for exploring incentives aimed at fostering a greener future. Throughout the experiment there is a general high concern towards the environment, but the concern only regresses positively with a few variables, suggesting an environmental attitude-behavior-gap. The data reveals a strong willingness to engage in sacrificial behaviors such as opting for public transport over taxis, turning off lights rather than leaving them on, and choosing vegetables over meat. In contrast, there was less inclination to sacrifice by choosing trains over flights, using reusable cups instead of single-use ones, or repairing items instead of discarding them. Variables that offer both high environmental benefits and low perceived sacrifice, such as selecting vegetables over meat, preferring local over non-local food, and waste separation, are ideal targets for designing incentives aimed at fostering a more sustainable future. Variables characterized by sharp probability curves and significant sensitivity to assigned weights also present optimal intervention points, as minor adjustments can lead to substantial behavioral shifts. I identify the choice between train and flight as the sole variable that cannot be influenced by behavioral efforts. Notably, the study found that waste separation might be the only behavior effectively motivated by monetary incentives. Consistently, participants prioritized losses, i.e., sacrifices, over gains, in line with Kahneman and Tversky’s findings. The findings in this study show opportunity for marketers and policymakers aiming to design effective environmental incentives. By acknowledging and harnessing individuals' willingness to sacrifice for more sustainable lifestyles, strategies can be developed to transform good intentions into impactful environmental actions, and thereby closing the green gab.