Discounting future green: Money versus the environment.

Abstract

In 3 studies, participants made choices between hypothetical financial, environmental, and health gains and losses that took effect either immediately or with a delay of 1 or 10 years. In all 3 domains, choices indicated that gains were discounted more than losses. There were no significant differences in the discounting of monetary and environmental outcomes, but health gains were discounted more and health losses were discounted less than gains or losses in the other 2 domains. Correlations between implicit discount rates for these different choices suggest that discount rates are influenced more by the valence of outcomes (gains vs. losses) than by domain (money, environment, or health). Overall, results indicate that when controlling as many factors as possible, at short to medium delays, environmental outcomes are discounted in a similar way to financial outcomes, which is good news for researchers and policy makers alike.

Delay Discounting and Social Policy Issues

“…Money was also discounted significantly less than expanding access to abortion for the participants who displayed non-zero AuC values for all of the proffered outcomes. These results are of interest because previous research (e.g., Hardisty & Weber, 2009) did not find differences in the discounting of money and environmental-policy outcomes. As noted previously, however, the future costs and likelihood of social policies continuing to be implemented may make them different from the commodity of money, causing social policies to be discounted more than monetary amounts.…”

“…At a theoretical level, these results support the conclusion that the process of discounting is occurring in a similar manner across the different social policy issues and the hypothetical monetary amount. As noted by Hardisty and Weber (2009) when referring to their results, this finding may be useful to policy makers because it suggests that, in at least some circumstances, policy makers can utilize a single framework when looking at discounting of a variety of different issues. With that said, it may be unwise for policy makers to utilize only a single rate of discounting because discounting rates will differ as a function of magnitude.…”

“…Differences can also be found within groups. For instance, although Hardisty and Weber (2009) did not find differences in the discounting rates of monetary and environmental outcomes, they did find that rates of discounting health outcomes differed from those for monetary and environmental outcomes. By comparison, others have found within-subject differences in the discounting of consumable (e.g., food) and nonconsumable (e.g., money) commodities (Odum & Rainaud, 2003), at least when it comes to delay discounting (vs. probability discounting; Estle, Green, Myerson, & Holt, 2007).…”

“…A third determination was how these social policies are discounted relative to a non-social-policy outcome, such as winning a hypothetical sum of money ($100,000). Previous research (e.g., Hardisty & Weber, 2009) has suggested that discounting of environmental issues may not differ from discounting of monetary outcomes. However, as noted previously, there may be reasons for expecting social policies to be discounted more steeply than hypothetical sums of money.…”

“…Psychologists have also started to measure discounting of a wide range of outcomes as well as to try to understand how the discounting of these outcomes relates to the discounting of money. For instance, Hardisty and Weber (2009) measured rates of delay discounting for both hypothetical monetary and environmental outcomes (i.e., improvement in air quality or increases in garbage). Their results suggested that financial and environmental outcomes were discounted similarly.…”