The Inequality Trap & Willingness-to-Pay for Environmental Protections: The Contextual Effect of Income Inequality on Affluence & Trust

ABSTRACT

Prior studies show affluence and trust increases economic support for environmental protections. However, despite widespread economic prosperity over the last two decades, variation in support for environmental protections persists across countries. We contend this variation is attributable to the growth of national income inequality which “traps” societies in environmental indifference by mitigating the effects of affluence and trust on the willingness-to-pay for environmental protections. Drawing on data from 45,000 adult respondents in 51 countries from multiple waves of the World Value Survey, we find economic development, socioeconomic status, and trust are important determinants of a respondent’s willingness-to-pay for environmental protections. More importantly, we find disposable income inequality suppresses the effects of these determinants on willingness-to-pay. Overall, the study illustrates how economic inequality contextualizes the effects of affluence and trust on environmental support which creates a barrier to widespread environmental support across countries.

KEYWORDS:

• Environmental concern
• income inequality
• affluence & trust

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. Subjective social class shows a moderate association with relative income (G = .46; p < .01; n = 265,352); a low to moderate association with educational attainment (G = .35; p < .01; n = 265,042); and a low to moderate association with occupational type (G = .24; p < .01; n = 165,494) in the WVS sample.

2. Public goods are viewed as being non-excludable and non-rivalrous, like clean air or highways. Private goods differ in that are excludable and can provide benefit to the owner, like food and cars.

3. Table A1 shows the full list of countries and waves in the sample.

4. Both indicators show high agreement in the sample (G = .75, p < .01). Additionally, we recode the variables into binaries because recent cross-national public opinion research suggests reducing extreme values of opinion scales by transforming attitudinal scales into binomial indicators (Summers and VanHeuvelen 2017).

5. We also test an ordinal measure of WTP (0 = disagree to paying higher taxes and prices; 1 = agree with either paying higher taxes or prices; 2 = agree with to paying higher taxes and prices). We find the model estimate are consistent with the main results (see Table C1).

6. We also estimate a set of models with a categorical treatment of social class where lower-class serves as the reference category; results are substantively the same.

7. We recoded the WVS occupation measure into these three categories. Categories 13, 16, and 61 were collapsed into managerial. Categories 21, 22, 23, 24, and 25 were collapsed into non-manual. Categories 32, 33, 34, 41, and 42 were collapsed into manual.

8. Country-level covariates are measured in the year prior to the survey year in WVS. We merged country-level data using probabilistic matching of country name and year of survey.

9. We also estimated models excluding these covariates and the results were substantively the same.

10. We also estimated these models using two-way fixed effects for country & year of survey. Table B1 shows the results which are consistent with the results of the random-effects models.

11. We test whether logged GDP per capita moderates the effects of SES and trust on WTP and found null results (β = .010; p = .61).

12. We test whether income inequality moderates the effect of other respondent-level covariates in the model. Results show age, gender, and political orientation are moderated by disposable income inequality (see Table D1).

Additional information

Notes on contributors

Anthony Roberts

Anthony Roberts is an assistant professor in the Department of Sociology at Colorado State University. His research focuses on understanding the impacts of financialization, globalization, and development on income inequality in advanced and emerging economies. His work has appeared in Socio-Economic Review, Social Forces, Sociology of Development, and the International Journal of Comparative Sociology.

Severin Mangold

Severin Mangold is a recent graduate of the MA program in the Department of Sociology at Colorado State University. His research focuses on lifestyle and social movements centered around pro-environmental behaviors and attitudes, most recently within tiny house communities. His work has appeared in Social Sciences.