The neuroeconomics of environmental decision-making [electronic resource] : individual differences and behavior

Mobilizing to effectively respond to climate change and other major environmental challenges requires a new way of thinking and new approaches to decision-making. This dissertation combines econometric surveys with behavioral economics and neuroimaging experiments to examine environmental decisions in two contexts: how individuals assign value to natural resources and donate to protect them, and how consumers make appliance purchases with energy-efficient options. Neuroeconomics allows us to identify the brain regions that predict behavior, and understand how neural activity in these regions may be influenced by key elements of the decision process, such as the presence of eco-labels. Part I enumerates some of the difficulties with current survey methods for obtaining the value that individuals place on natural resources and ecosystem services, and explains how neuroeconomic methods may complement these surveys. A pair of studies, one behavioral and one using functional magnetic resonance imaging (fMRI), elicited real donations from individuals to protect natural resources under threat of destructive land uses. Individuals' willingness-to-pay (WTP) was determined more by negative affect toward the destructiveness of the land use than by positive affect toward the park land under threat. Activity in the anterior insula, a brain region associated with negative affect, positively predicted donation and was increased when viewing destructive land uses, particularly in individuals with strong pro-environmental attitudes. Activity in the medial prefrontal cortex, associated with cost-benefit assessments, actually negatively predicted donation, suggesting that the region may encode the value of money withheld for one's self, rather than the donation's value in environmental benefits. Part II examines the individual drivers of consumer purchases of appliances with energy-efficient options through a national survey of 1,550 homeowners as well as an fMRI purchasing task. Individuals respond heterogeneously to the presence of the Energy Star eco-label. Moreover, when comparing consumer decisions in the national survey to an economically-rational benchmark of what individuals should be willing to pay for reductions in energy consumption, two individual differences were associated with large departures from rationality. High numeracy, or mathematical aptitude, was associated with significant underestimation of the value of energy consumption savings, while strong pro-environmental attitudes were associated with overvaluation. In the fMRI task, subjects chose whether to purchase CFL light bulbs with varying annual energy costs, some of which featured an Energy Star label, at different prices. The nucleus accumbens and caudate, both regions within the ventral striatum that are responsive to positive affect, increased activity in response to low prices and the presence of the Energy Star label. Nucleus accumbens activation also positively predicted purchase, while medial prefrontal cortex activity negatively predicted purchase. Neural response to the CFL bulbs' attributes also differed based on individuals' environmental attitudes, numeracy, and temporal discount rates. I propose that combining methods from behavioral economics and neuroeconomics can inform environmental policy and education by providing a more nuanced view of the roles of individual characteristics and information processing during environmental decision-making. These insights can then shape the design of behavioral interventions to best benefit both the individual and the environment.

Advisor: Ardoin Nicole M. (Nicole Michele) primary advisor. Thesis advisor
Knutson Brian primary advisor. Thesis advisor
Heise Ursula K. advisor. Thesis advisor
Sapolsky Robert M. advisor. Thesis advisor