Behavioral Economics and Neuroeconomics of Environmental Values

Abstract

Identifying mechanisms of real-life human decision-making is central to inform effective, human-centric public policy. Here, we report larger trends and synthesize preliminary lessons from behavioral economic and neuroeconomic investigations focusing on environmental values. We review the currently available evidence at different levels of granularity, from insights into how individuals value natural resources (individual level), evidence from work on group externalities, common pool resources, and social norms (social group level) to the study of incentives, policies, and their impact (institutional level). At each level, we identify viable directions for future scientific research and actionable items for policy-makers. Coupled with new technological and methodological advances, we suggest that behavioral economic and neuroeconomic insights may inform an effective strategy to optimize environmental resources. We conclude that the time is ripe for action to enrich policies with scientifically grounded insights, making an impact in the interest of current and future generations. Expected final online publication date for the Annual Review of Resource Economics, Volume 15 is October 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.