Distributive Conflicts and Willingness to Pay for the Environment1
Antonio M. Jaime-Castillo
Universidad de Málaga
José M. Echavarren
Universidad Pablo de Olavide
Javier Álvarez-Gálvez
Universidad Loyola de Andalucía
Abstract: According to several studies there is a positive relationship between affluence
and willingness to pay for the environment. Previous studies suggest that if
environmental quality is a normal good, higher-income individuals would be more
willing to pay for environmental protection than lower-income individuals. In this paper
we argue that the positive relationship between willingness to pay for the environment
and income is the result of a distributive conflict between redistributive taxes and
environmental taxes. We test our hypotheses using data from ISSP (Environment III)
for a sample of European countries. We use a biprobit multilevel model in order to test
the effect of income and other control variables on the willingness to pay taxes for the
environment and redistributive taxes. Our results show that rich (poor) individuals are
more (less) willing to pay environmental taxes and less (more) willing to pay
redistributive taxes. Rich individuals dislike redistributive taxes given that they are net
losers from the redistribution game, while they might support higher environmental
taxes because the environment is a public good. In addition, other explanatory variables
have the opposite effect on the willingness to pay environmental taxes and redistributive
taxes.
Keywords: contingent valuation, environment, willingness to pay, income effects,
redistribution
1
Draft version. An earlier version of this paper was presented at the III REPS Conference in Pamplona
(Spain), 2011. We are grateful to all the participants in the session for helpful comments and suggestions,
particularly to Pau Marí-Klose, José A. Noguera, Toni Llácer and Inés Calzada. The usual disclaimer
applies.
1
1. Introduction
Environmental issues have grown in importance since the mid-twentieth century.
From that time onwards the rise of environmental problems and the development of
ecologist movements have spread swiftly across the industrialized world.
Environmental problems have become global too, and some authors even consider that
ecological crisis threatens modern society itself (Lovelock 2009). Needless to say,
societies are part of the problem as well as part of the solution and this is why social
scientists become more concerned about environmental behaviors and preferences
during the last decades, which in turn will be very important in the design of sustainable
policies. In this paper we focus on social preferences for environmental taxation, one of
the main tools for green policies. Focusing on taxation rather than in other kind of proenvironmental preferences allows us to connect the preferences for environmental taxes
with the whole debate about the fiscal structure of modern welfare states.
When we focus on environmental preferences an important question arises: why
are individuals willing to pay for the environment and which differences can we find
between social groups in regard to this question. From a traditional point of view in
economics, paying for the environment does not fit well with an individual rational
cost-benefit approach. Why should someone pay for a public good that by definition is
non-excludable? The literature offers two different answers to this question: a) some
institutional contexts might foster trust and cooperation between rational individuals,
enabling them to overcome collective dilemmas (Ostrom 1990); b) following a
normative approach it could be argued that people are driven by altruistic motives and
choose to follow social norms (Guagnano et al 1994).
In this paper we focus more specifically on the question of why some people are
more willing than others to pay for environmental goods. Several studies have found
relevant differences among social groups with regard to environmental issues (Inglehart
1997; Galtung 1964). Even those authors who focus on the relative homogeneity of
environmental concerns throughout society admit that differences do exist and can play
a role in contemporary societies2 (Jones & Dunlap 1992). However, a more in-depth
analysis is needed by focusing on the factors that explain those differences. In order to
shed light on this issue, we identify the factors that help us to explain the differences
2
Although for these authors those differences might be small and decreasing in time.
2
concerning the willingness to pay taxes for the environment as part of the more general
distributive conflicts that exist in a particular society.
2. Theoretical overview
Given that we cannot directly measure preferences for public good, when we
analyze public goods (such as the environment), we have to use indirect methods such
as contingent valuation methods (CVM henceforth). In CVM people are asked how
much money they would spend on a certain public good. The method is called
contingent because individuals’ valuations are contingent upon the particular
hypothetical market described to them (Mitchell & Carson 1989). It was first used in
1947 (by Ciriacy-Wantrup) and after that it has been broadly used (Carson 1994; Jones
2009; Jacobsen 2009) as well as criticized (Diamond & Hausman 1994). Scott summed
up his distrust in CVM by pointing out that whenever you “ask a hypothetical question
[...] you get a hypothetical answer” (Boyle et al 1994: 65). Nevertheless, some studies
have shown that differences between stated and real preferences concerning public
goods are not big enough to discard CVM (Johannesson et al 1997). Moreover, when
some authors find relevant differences in this regard they claim that “although biased,
hypothetical valuation convey useful information about individual’s real willingness to
pay” (Botelho & Costa 2002: 995).
One of the most widespread critiques of CVM is the so called embedding effect
(Diamond & Hausmann 1994), i.e. a scope effect that violates a basic assumption of
classic economics: the effect of non-satiated utility so that willingness to pay
(henceforth WTP) should be higher for a higher number of that good. The WTP for a
lake should be proportionally higher when we take into consideration two lakes and so
on. Carson and Mitchell (1993) point out that the embedding effect is not inherent to
CVM itself but may be due to flaws in survey design leading to amenity
misspecification bias. Carson (1994) reviewed 27 papers and found statistically
significant scope effects on WTP in 25 of them, as other authors did before with larger
samples (Walsh et al 1992)3. Hanemann argues that some important studies that found
embedding effects to be outstanding aren’t fully reliable (Hanemann 1994). As
Hanemann puts it, WTP preferences are a stable construct “comparable to the most
3
Hanemann even argues that the embedding effect in WTP is “a myth” (Hanemann 1994: 34).
3
stable social attitudes such as political party identification” (Hanemann 1994: 28) and as
such are useful as objects of study.
Willingness to pay for the environment has been extensively studied from
diverse perspectives. The main approaches identified in the literature may be classified
into three categories: the structuralist view, the altruistic approach and the basic
economic model. A great deal of the studies belonging to the first group is carried out
by sociologists. The structuralist perspective focuses on collective action and attempts
to explain WTP as the result of changes in values in modern societies or by the
influence of social institutions on social actors. Changes in values regarding
environment can be explained by some authors as a reaction to the rise of the
environmental damage that took place since the 1950’s in industrial societies (Dunlap et
al 1993). Other authors (Inglehart 1997) claim that this cultural shift is the consequence
of a change in the priorities order in societies where quality of life and connected issues
(such as environmental care) are more valued than more elemental matters (like work or
housing). Dunlap (1991), Ivanova and Tranter (2004), or (Jones, 2009) follow this
perspective in recent studies.
The altruistic approach includes the studies on WTP that highlight the ethical
motivation as the main explanation of preferences for public goods. Unlike the
structuralist view this approach is individualistic by nature. The explanations of the
WTP for the environment are based on choices where individuals do not only care for
selfish goals but also for others’ wellbeing. This perspective is found in Normative
Economics and Environmental Psychology. The altruistic approach not only deals with
warm-glow effects (known as impure altruism) as Aldred (1994) argues. In fact,
Johansson (1998) differentiates between seven altruistic alternative motivations for
WTP, namely pure altruism, paternalistic (environment-focused) altruism, impure
altruism, genuine altruism, altruism towards non-human creatures, commitments, and
social norms. Some empirical studies within this approach are Liebe et al (2011),
Guagnano et al (1994) or Kahneman and Knetsch (1992).
The basic economic model of rational choice is individualistic and considers
individual’s choices to be rational (although bounded by individual’s goals and
contexts). Jones (2009) identifies three main groups of factors influencing individual
preferences in WTP4. 1) Demographic data such as gender, age, level of education, or
4
Jones also includes other aspects like political factors (like involvement of the state in the provision of
environmental goods), or issues of collective action (social capital for instance) (Jones 2009: 512).
4
political orientation; 2) Factors which refer to individuals’ attitudes towards the
environmental good being valued; and finally, 3) economic factors like income,
profession, or employment status. Income has been one of the most important variables
in WTP studies (Liebe et al 2011) and it has been broadly used as an explanatory factor
(Israel & Levinson 2004; Jones 2009; Jacobsen 2009). Although for several authors
income is a poor predictor (Ivanova & Tranter 2004; Israel & Levinson 2004) or some
studies don’t find it to be statistically significant (Bulte et al 2005; Hanley 2008) most
of the works including income show a significant relation between income and WTP for
environment (Witzke & Urfei, 2001; Popp 2001; Jones 2009). In his recent and
exhaustive meta-study on the relation of income and WTP for environment Jacobsen
states that “we are able to show that, across countries and habitats, there seems to be a
significant effect of income on WTP for species and habitat conservation, and that this
effect is as well-measured using GDP per capita as self-reported income” (Jacobsen
2009: 150).
We can identify several reasons to explain the influence of income on WTP for
environment. Probably the most obvious one is budget’s availability. At first sight it
makes sense to think that since WTP involves spending money, those who have higher
incomes will be more willing to pay (Liebe et al 2011). Veisten et al (2004) add also the
substitution effects. “[D]iscretionary budgets are much less than household wealth and
income, since many kinds of expenditures are fixed in the short run. This may lead to de
facto substitution between different types of goods, since one (hypothetical) purchase
can strongly diminish or even eliminate the budgets that were available after covering
fixed expenditures. Thus, constrained optimization may explain that some respondents
will not pay for, e.g., c after holding b” (Veisten et al 2004). Nevertheless it seems a
rather tautological statement explaining positive WTP just by saying that richer people
can pay more; this doesn’t mean necessarily that they are more willing to do it.
Other authors focus on the nature of the good itself. They show that nature is a
normal good (Franzen 2003; Torgler & Garcia 2005; Popp 2001) and we know that
“economic theory suggests that if environmental quality is a normal good, all else
constant, higher-income households will be more willing to pay for environmental
protection than lower-income households” (Ivanova & Tranter 2004 : 8). The nature of
the environment as a public good is yet controversial. Some authors argue that
environment is a luxury good (Dunlap et al 1993; McFadden & Leonard 1992). This
idea is particularly popular among the papers regarding EKC (Auci 2006). Although
5
most of the studies suggest that environment is rather a normal good than a luxury good
(Kristrom & Riera 1996) the debate is still unsettled5. Nevertheless, there is consensus
in the literature that environment is not an inferior good and it is at least a normal good
(Kristrom & Riera 1996: 47), so we can expect a positive relation between WTP for the
environment and income.
3. Distributive conflict and environment
Drawing on the previous pieces of literature, the relation between WTP for the
environment and income can be explained by means of a redistributive conflict where
rich and poor people hold different interests regarding environmental taxation. Rich
people would be more willing to pay taxes for environment rather than redistributive
taxes because they are net losers from redistributive policies. Poor people, on the other
hand, would prefer redistributive taxes for the opposite reasons. This perspective that
has been neglected so far help us to explain the relation between income and WTP. In
the literature on welfare policies, several studies suggest that potential beneficiaries of
redistributive programs are more supportive of taxation policies (Linos 2003). This is
why poor people would prefer redistributive taxes rather than environmental ones. In
addition, “members of the workforce might fear a rise in unemployment rather than
hoping for new jobs being created due to environmental policies” (Witzke & Urfei :
2001). This is a new form of the old rivalry between “reds” and “greens” where the
former want development and employment and the others prefer quality of life (whether
human or not).
We can think of some other reasons that might deepen this cleavage. Some
authors argue that working class can perceive environmental policies (such as
environmental taxation) as elitist (Morrison & Dunlap 1986). From this perspective,
some environmental policies could be interpreted as privileging wealthy residential
areas and protecting certain outdoor recreational activities, which are mostly enjoyed by
upper class citizens. This approach argue that environmental policies not only favors the
rich but also derive costs especially to the least privileged (Morrison & Dunlap 1986:
581). Working class can perceive this distributional impact as regressive (whether being
true or not) and distrust environmental taxes. In fact, we can find many examples in
5
Interestingly enough Costa (1997) found that elasticity has been decreasing since XIX century (using
data for USA) until reach a punctuation barely above one nowadays.
6
history where environmental policies can be plainly explained as a restriction to
crematistic activities of the poor in order to protect recreational activities of the rich
(Thomas 1983).
Nevertheless, the WTP is not always income elastic. Substitution goods make an
important part here. Hence, we can find income elasticity below one in the WTP for
particular natural spots rather than environment as a whole (Kristrom & Riera 1996:
52). Sometimes taking care of local environment can be considered a survival issue
because. For instance, if drinking water depends on environment protection, or if local
jobs in fishery depend on the good quality of water6. In these cases, poor people could
prefer environmental taxes rather than redistributive ones. In addition, rich people might
have a better chance to escape from local pollution by gaining access to natural
resources elsewhere. For instance, poor people may defend the local beach more than
richer people who can afford a flight to some expensive resort abroad. Literature
belonging to the structuralist perspective supports this fact, pointing out that local
environmental interest correlates with materialism (Göksen et al 2001) and that low
class correlates with materialism as well (Inglehart 1997).
All in all, we should expect a positive relationship between income and the
willingness to pay for environmental taxes, while the opposite would be true for
redistributive taxes, since the rich are net losers from the game of redistribution. As
previously argued, there should be a redistributive conflict about the distribution of
taxes. While the rich would prefer environmental taxes the poor would prefer
redistributive taxes, as the gain from direct redistribution should be higher than the
gains from a better environment. Nevertheless, distributive conflicts are shaped by the
particular history of each country and cross-class coalitions that give rise to different
policy constellations. For this reason, we select a sample of countries according to the
classification of welfare regimes (Esping-Andersen, 1990) in order to test whether the
distributive conflicts about environmental and redistributive policies varies across
countries.
Our sample includes one country from the social-democrat regime (Sweden),
one the conservative regime (Germany), one from the liberal regime (United States) and
one from the Mediterranean regime (Spain) as depicted by Moreno (1998) and Ferrara
(1998). We also include Netherlands as a baseline country in which the willingness to
6
This is the basis of the so called “ecologism of the poor” (Martínez-Alier 2009).
7
pay for environmental taxes is particularly high as compared to other Western. From the
previous theoretical overview we derive the following hypotheses:
H.1. The willingness to pay taxes for the environment will increase with socio-economic
status.
H.2. The willingness to support redistribution will decrease with socio-economic status.
H.3. The redistributive conflict will be stronger in the social-democrat an conservative
regime
H.4. The environmental conflict will be stronger in countries where the environmental
awareness is stronger.
4. Data and methods
Data and variables
We use two dependent variables from the 2000 Environment II Module of the
International Social Survey Programme (ISSP) in order to measure preferences for
redistributive and environmental taxes. The first variable was referred to the willingness
to pay taxes to protect the environment. The question reads: “And how willing would
you be to pay much higher taxes in order to protect the environment?” The available
responses were: (1) Very willing; (2) Fairly willing; (3) Neither willing nor unwilling;
(4) Fairly unwilling; and (5) Very unwilling. The second variable measures state’s
responsibility to redistribute income: “Government should redistribute income from the
better-off to those who are less well-off”. The possible responses were: (1) Strongly
agree; (2) Agree; (3) Neither agree nor disagree; (4) Disagree; and (5) Strongly
disagree. We coded these two variables as dichotomous variables, taking values 1 and 2
as 1 (indicating willingness to pay for the environment and redistribution, respectively).
The rest of the values were coded as 0 (indicating unwillingness to support either
environmental taxes or redistribution).
We include seven independent variables from the same source, which have been
used in several studies on environmental economics (Jacobsen 2009; Ivannova 2004;
Israel & Levinson 2004; Torgler & García 2005). Our variable of interest is the
International Socio-Economic Index of occupational status (ISEI). This index is derived
from the International Standard Classification of Occupations (ISCO), and it captures
the socio-economic status as a combination of education and income. In this vein, this
8
variable improves the isolated effects of income (for methodological considerations
about the computation of this variable, see Ganzeboom et al. 1992). The rest of the
variables acting as controls are: gender (1=female; 0=male), age and quadratic age,
educational level (number of schooling years), political party affiliation (left-right) and
having children (1=yes; 0=no).
Statistical methodology
We assume that willingness to pay taxes for the environment and redistribution
of individual j can be defined by two latent variables yij*, which are a function of two
vectors of individual characteristics xj and zj:
y1*j  x j   1 j
(4a)
y2* j  z j    2 j
(4b)
We do not observe yij*, but two variables yij taking value 1 if yij* > 0 and 0
otherwise. Since, we expect that both the willingness to pay for the environment and
redistribution are correlated, we should estimate the two equations (4a) and (4b)
simultaneously. We further assume that error terms follow a normal bivariate
distribution with mean 0 and:
E  1   E   2   0
Var  1   Var   2   0
Cov  1 ,  2   
The vectors of coefficients (betas and lambdas) are estimated simultaneously by
a bivariate probit regression, which takes into account the correlation between error
terms in equations (4a) and (4b). Furthermore, this approach allows us to compute
simulated probabilities for the willingness to pay for each tax for different values of the
explanatory variables. In Figures 1 to 5, we depict these probabilities for each country
in the analysis for different levels of socio-economic status holding the rest of the
continuous variables at their averages and the dichotomous variables at 0.
9
5. Findings and discussion
In general terms, the willingness to pay taxes to protect the environment is
substantially lower than the willingness to support income redistribution by taxes. In
Table 2 only 26.5% of the whole sample is willing to pay taxes for environment while
37.6% of individuals think that government should not reduce the differences in
incomes. Since the predisposition to pay taxes to reduce inequality is higher that the
willingness to pay taxes for the environment, it seems plausible to assume that the
willingness to pay for environment is associated to second-order needs. In terms of
ecological attitudes, Finland is the country showing the lowest willingness to pay taxes
to protect the environment. The percentage of people in favor of paying taxes for the
environment is 12.0%. On the contrary, Netherlands shows the highest predisposition to
pay for the environment. Indeed, almost half of the individuals in the Dutch sample are
in favor of paying taxes for the environment (47.2%). If we compare the countries in the
ISSP sample, it emerges that usually the richest countries are those in which the
willingness to pay taxes to preserve the environment is higher (Great Britain, United
States, Netherlands, Japan…). Nevertheless, this is not a perfect rule, so we can find
some exceptions (e.g. Mexico). In this case, we should consider other specific factors,
such as cultural influences, ecological risks, previous experiences of ecological
disasters, or exposure to environmental degradation.
Regarding attitudes towards redistribution, Slovenia is the country with the
higher predisposition to support income redistribution by taxes (86.5% of the population
in the Slovenian sample thinks that government should redistribute). This country is
closely followed by others from Southern European or Mediterranean welfare state
regimes like Portugal (83.6%) and Spain (80.4%). On the contrary, Netherlands is the
country where redistribution gets the lowest support. Only 29.9% of individuals from
Holland think that it is the responsibility of the government to reduce the differences
between people with high and low incomes. Finally in the USA, 33.1% of the
population is in favor of redistribution.
[TABLE 2 ABOUT HERE]
10
Despite the differences between countries, results are in line with the literature
on environmental issues (Israel & Levinson 2004; Ivanova & Tranter 2004; Torgler &
Garcia 2005; Jacobsen 2009; Liebe et al. 2011). Once we have controlled for the effect
of other variables (i.e. gender, age, education, ideology, and having kids), we can
identify different models depending on the disposition to pay for redistributive or
environmental taxes that characterize each country. In Netherlands there is a clear
environmental conflict. In this country, individuals at the top of the social ladder are
willing to pay taxes to protect the environment, while they do not want to pay for
redistribution. West Germany is characterized by a distributive conflict about income
taxation. Socio-economic status produces statistically significant differences in the
willingness to pay redistributive taxes, but not in the case of environmental taxes.
Sweden illustrates an analogous pattern, but presenting a higher predisposition to pay
redistributive taxes. In Spain, we cannot find evidence of a redistributive conflict about
environmental and redistributive taxes, since the socio-economic status does not
produce a significant difference in the willingness to pay neither redistributive nor
environmental taxes and the probabilities of supporting both environmental and
redistributive taxes are relatively similar for individuals from diverse social positions.
Finally, the USA is characterized by an environmental conflict. In this country, as in
Netherlands, people from high socioeconomic position are the ones who want to pay
taxes for the environmental protection. We now analyze each country in more detail.
The effect of the socio-economic status on the willingness to pay environmental
and redistributive taxes is highly significant in Netherlands (p≤0.05). We can observe a
positive slope of the ISEI in the case of paying environmental taxes (0.016), so we can
argue the probability to pay taxes for environment increases with income. On the other
hand, we can observe the negative effect of the ISEI on the willingness to pay for
redistribution. These results are in line the high environmental awareness of Dutch
people as highlighted by previous studies (Franzen 2003; Torgler & Garcia 2005).
The probabilities of paying for both environmental and redistributive taxes are
relatively low (about 0.14) and constant along the socio-economic status ladder. On the
other hand, the probability of paying taxes to protect the environment increases with the
socioeconomic status. While the probability of paying taxes for the environment is 0.11
for an individual from the lowest socioeconomic status, the probability rises to 0.65 for
ISEI 91. Regarding the willingness to support redistribution we observe the opposite
trend. Thus whereas a substantial share of the people from low socioeconomic status
11
think that government should reduce the income differences (0.38), the probability
decreases to 0.03 for people at the top of the social ladder (ISEI=91). Finally the
proportion of people who do not want to pay neither environmental nor redistributive
taxes is about 0.40 for lower and middle statuses, falling to 0.21 for the individuals from
the highest status.
[FIGURE ABOUT 1 HERE]
In Germany it is possible to find significant statistical differences in the
willingness to pay redistributive taxes and depending on the socio-economic status
(p≤0.05), but this effect is not significant for environmental taxes (p>0.05). On the other
hand, although we do not find significant statistical differences in the willingness to pay
for the environment depending on the socio-economic status, the sign of the coefficient
is positive. Again the probabilities of paying both redistributive and environmental
taxes are below 0.12, falling to 0.07 for individuals from the highest statuses. In
addition, the blue line that depicts the association between paying no taxes and socioeconomic status, we observe the opposite trend (growing linearly from 0.30 to 0.56).
Unlike Netherlands, the willingness to pay for environmental taxes does not show
relevant differences by status, though it tends to increase smoothly. However there is a
clear cleavage around redistribution. Germans from low socioeconomic statuses are
more willing to consider that it is the responsibility of the government to reduce income
differences. Hence, in contrast to Netherlands, we can conclude that Germany shows a
lower predisposition to protect the environmental resources, while showing stronger
differences in the willingness to support redistribution.
[FIGURE 2 ABOUT HERE]
Sweden is a country where people want to pay redistributive taxes to reduce the
income differences between persons with lower and higher incomes, while there is a
low willingness to pay environmental taxes. We have found significant statistical
differences in paying for redistribution (p≤0.05), but not in paying environmental taxes.
Although probabilities of paying taxes for the environment increase with status, these
differences are too small to be statistically significant. On the other hand, the coefficient
for supporting redistribution is significant, which produces a sharp decline in the
12
willingness to redistribute as status increases. The probability of supporting
redistribution falls from 0.67 for the lowest status to 0.34 for the highest socioeconomic position. At the same time, the willingness to pay no taxes shows the inverse
tendency, going from 0.13 to 0.48. Hence we can conclude that Swedes from the
highest socio-economic statuses do not want to pay taxes neither to reduce income
differences nor to preserve the environmental resources.
[FIGURE 3 ABOUT HERE]
As we previously mentioned, in Spain there is not sign of a real conflict between
environmental and redistributive taxes. Thus we can say that there is broad agreement
about the necessity to reduce income differences while there is cross-class consensus
against environmental taxes. In Figure 4 we can see that the willingness to pay for
environmental taxes only grows from 0.05 to 0.13 from the bottom to the top of the
social ladder, while the willingness to support redistribution decreases from 0.63 to
0.42. Hence, only Sweden can be compared with Spain in terms of preferences for
redistribution. On the other hand, the willingness to pay no taxes is moderately low as
compared to Netherlands and Sweden, while the predisposition to pay for both
environmental and redistributive taxes is higher even form people from high socioeconomic positions.
[FIGURE 4 ABOUT HERE]
In the United States, the relationship between the socio-economic status and the
willingness to pay for environmental is slightly statistically significant (p<0.10), but not
in the case of the willingness to pay for redistribution. Here we can find a positive effect
of the socio-economic status on the willingness to pay taxes to protect the environment.
In general, Americans do not want to pay taxes, neither environmental nor
redistributive. The probability of the willingness to paying no taxes is about 0.50, going
from 0.53 to 0.46 from the top to the bottom of the social ladder. In addition, the
probability of willingness to pay for both reasons is very low. We can compare these
results with some European countries to understand how big the differences are. While
in countries like Sweden or Spain the probability of supporting redistribution is about
0.60 (0.40 in Netherland) for an individual from the lowest socio-economic status, in
13
the USA this probability is 0.25. On the other hand, the probability to pay for
environmental taxes goes from 0.12 to 0.28 from the bottom to the top of social ladder.
[FIGURE 5 ABOUT HERE]
6. Conclusions
According to several studies there is a positive relation between affluence and
willingness to pay for the environment (Bateman & Langford, 1997; Roe et al, 2001;
Witzke & Urfei, 2001; Jones et al, 2009). Some researchers explain this relation
considering the Environmental Kuznets Curve that explains how poor countries tend to
trade worse environmental quality for more income (Israel et al, 2004; Auci, 2006). As
they become richer and more polluted, individuals living in poor countries become more
willing to trade income for environmental improvements. Other studies suggest that if
environmental quality is a normal good, higher-income people would be more willing to
pay for environmental protection than lower-income people (Bateman and Langford,
1997; Witzke & Urfei, 2001). We rather explain the positive relation between
willingness to pay for the environment and income as the result of a conflict of
redistribution. Rich individuals dislike redistributive taxes given that they are net losers
from the redistribution game, while they may support higher environmental taxes
because the environment is a public good.
Using a bivariate probit analysis, we have found that the probability of the
willingness to support redistribution decreases as socio-economic status increases in
almost every country. At the same time, the probability of the willingness to pay taxes
for the environment decreases as status increases but its effect is only significant for
some countries. As Torgler & García (2005) point out “individuals with a higher
income have less pressing economic problems and are therefore more willing and able
to reduce their standard of living to spend more money on global environmental
problems”. Hence, we can confirm hypotheses H1 and H2.
Regarding the nature distributive conflicts cross countries we can conclude that
the redistributive conflict is deeper in the social-democrat and the conservative regimes,
as exemplified by Sweden and Germany in our study. This is because class conflicts
that give rise to big welfare states in these countries overcome the salience of
environmental conflicts. On the other hand, the environmental conflict seems to be
14
strong in countries where there is a high environmental awareness, such as Netherlands.
Interestingly, we have found two rather consensual situations in two different welfare
regimes: the liberal and the Mediterranean, as exemplified by the United States and
Spain, in which social inequality is relatively high as compared to other Western
countries. In the first case, there is a strong consensus against taxes either for
environmental or for redistributive purposes because inequality is perceived as a
product of fair economic outcomes. In the later case, there is consensus in favor of
redistribution, since inequality is perceived as an unfair economic output. Nevertheless,
more in-depth research is needed to understand the nature and origins of the particular
distributive conflicts that shapes the history of countries with different socio-political
structures.
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17
TABLES AND FIGURES
Table 1: Descriptive statistics of the variables used in the analysis
Variables
WTP Taxes
Equal
ISEI
Gender
Age (Linear)
Age (Quadratic)
Educ. Years
Ideology
Kids
Obs.
29,260
29,030
20,839
31,028
30,922
30,922
27,772
15,807
26,786
Mean
0.265
0.624
43.009
0.550
45.796
2389.322
11.560
2.887
0.396
Std. Dev.
0.441
0.484
16.53
0.498
17.089
1672.750
3.802
0.994
0.489
Min.
0
0
16
0
15
225
1
1
0
Max.
1
1
90
1
96
9.216
70
5
1
Table 2: Willingness to pay for environmental and redistributive taxes (by country).
Environmental taxes
Unwillling to
pay
Willing to
pay
Country
West Germany
79,2
20,8
East Germany
86,5
13,5
Great Britain
67,8
32,2
Northern Ireland
79,2
20,8
United States
68,4
31,6
Austria
80,8
19,2
Ireland
65,7
34,3
Netherlands
52,8
47,2
Norway
77,2
22,8
Sweden
80,5
19,5
Czech Republic
82,8
17,2
Slovenia
67,7
32,3
Bulgaria
83,5
16,5
Russia
70,1
29,9
New Zealand
68,9
31,1
Canada
75,9
24,1
Philippines
72,5
27,5
Israel
70,7
29,3
Japan
62,8
37,2
Spain
77,8
22,2
Latvia
82,8
17,2
Portugal
82,9
17,1
Chile
70,9
29,1
Denmark
72,9
27,1
Switzerland
66,5
33,5
Finland
88,0
12,0
Mexico
65,3
34,7
Total %
73,5
26,5
International Social Survey Programme 2000: Environment II
Redistributive taxes
Government
should NOT
redistribute
53,0
26,5
37,1
35,7
66,9
35,6
32,2
70,1
33,0
33,5
43,8
13,5
28,0
25,1
56,9
48,7
50,4
24,2
57,7
19,6
36,4
16,4
25,1
44,6
41,7
23,1
29,5
37,6
Government
should
redistribute
47,0
73,5
62,9
64,3
33,1
64,4
67,8
29,9
67,0
66,5
56,2
86,5
72,0
74,9
43,1
51,3
49,6
75,8
42,3
80,4
63,6
83,6
74,9
55,4
58,3
76,9
70,5
62,4
18
Table 3: Results of the bivariate probit regression
West
Germany
Netherlands
Sweden
Spain
United
States
0.004
(0.006)
−0.087
(0.145)
0.018
(0.041)
<−0.001
(0.000)
0.048*
(0.028)
−0.186**
(0.085)
0.230
(0.154)
−1.575*
(0.922)
0.016***
(0.004)
0.111
(0.103)
0.010
(0.024)
<0.001
(0.000)
0.023
(0.015)
−0.146***
(0.049)
−0.017
(0.120)
−1.190*
(0.631)
−0.001
(0.005)
0.035
(0.134)
−0.051*
(0.028)
0.001*
(0.000)
0.064***
(0.023)
−0.241***
(0.073)
−0.162
(0.160)
0.091
(0.708)
0.007
(0.007)
−0.044
(0.200)
0.089
(0.073)
−0.001
(0.001)
0.0751**
(0.030)
−0.032
(0.118)
−0.440*
(0.226)
−3.702**
(1.500)
0.006*
(0.003)
−0.151*
(0.090)
−0.001
(0.015)
−0.000
(0.000)
0.031
(0.019)
−0.202***
(0.059)
−0.091
(0.102)
−0.311***
(0.443)
−0.013**
−0.012***
−0.014***
−0.002
(0.006)
(0.004)
(0.004)
(0.007)
Female
−0.174
−0.401***
0.105
0.302
(0.133)
(0.112)
(0.127)
(0.208)
Age (Linear)
0.002
−0.009
−0.028
0.049
(0.037)
(0.025)
(0.028)
(0.081)
Age (Quadratic)
−0.000
0.000
0.000
−0.000
(0.000)
(0.000)
(0.000)
(0.000)
Educ. Years
−0.008
−0.004
0.005
−0.040
(0.027)
(0.016)
(0.021)
(0.031)
Ideology
−0.051
0.074
−0.458***
−0.208*
(0.079)
(0.052)
(0.068)
(0.121)
Kids
0.098
−0.057
0.103
−0.514**
(0.142)
(0.132)
(0.147)
(0.237)
0.564
−0.292
2.478***
0.475
Constant
(0.812)
(0.669)
(0.692)
(1.573)
397
No. Obs.
628
480
199
0.039
0.082
0.315***
−0.080
athrho
(0.089)
(0.070)
(0.098)
(0.138)
0.0395
0.0815
0.305
−0.080
rho
(0.089)
(0.069)
(0.088)
(0.137)
−471.923
Log likelihood
−763.983
−494.350
−216.975
Notes: ***, **, and * indicate significance level at 1%, 5%, and 10%, respectively.
Standard errors in brackets.
Source: ISSP, Environment II (2000).
−0.003
(0.003)
0.132
(0.092)
−0.028*
(0.015)
0.000
(0.000)
−0.019
(0.019)
−0.375***
(0.061)
−0.125
(0.102)
1.824***
(0.451)
903
0.179***
(0.059)
0.177
(0.057)
−1075.598
WTP Environmental taxes
ISEI
Female
Age (Linear)
Age (Quadratic)
Educ. Years
Ideology
Kids
Constant
WTP Redistributive taxes
ISEI
19
Figure 1: Willingness to pay taxes in Netherlands
.4
0
.2
Probability
.6
nl-netherlands
0
20
40
60
80
100
ISEI
None
Environment
Redistritution
Both
Figure 2: Willingness to pay taxes in Germany
.4
.2
0
Probability
.6
d-w-germany-west
0
20
40
60
80
100
ISEI
None
Environment
Redistritution
Both
20
Figure 3: Willingness to pay taxes in Sweden
.4
0
.2
Probability
.6
.8
s-sweden
0
20
40
60
80
100
ISEI
None
Environment
Redistritution
Both
Figure 4: Willingness to pay taxes in Spain
.4
.2
0
Probability
.6
e-spain
0
20
40
60
80
100
ISEI
None
Environment
Redistritution
Both
21
Figure 5: Willingness to pay taxes in United States
.3
.2
.1
Probability
.4
.5
usa-united states
0
20
40
60
80
100
ISEI
None
Environment
Redistritution
Both
22