Norms, image, and private contributions to public goods: Implications for public goods policy

This dissertation examines individual motivation to provide public goods and implications for public policy designed to influence private provision. It merges psychology and sociology with economics to develop a behavioral model in the context of an environmental issue. The model supposes that individuals have preference over their image of themselves as environmentally responsible people. This image is partially determined by norms they hold about how much to contribute to the public good. These norms, in turn, are influenced by policy-makers, for example through a mechanism such as environmental campaigns.

The first chapter lays out the conceptualization of norms used in the subsequent chapters. The main points are that I distinguish between statistical norms, what “is” done, and injunctive norms, what “should” be done. Injunctive norms are sanctioned either by oneself, others, or both. This simple typology is contrasted with existing conceptualizations of norms in the literature.

The second chapter is an empirical analysis which makes some conclusions about how norms affect self-sanctioning through a change in self-image. Survey data regarding hypothetical contributions to a carbon offsetting program show that (1) the higher is one's contribution, the higher is his self-image, and that (2) the higher is one's injunctive norm of how much he thinks one should contribute, the lower is his self-image. This indicates that, depending upon the context, the norm itself should enter individuals' utility functions. It is also shown that self-image itself increases after a contribution has been made, as opposed to individuals making a contribution that is consistent with a given self-image.

Chapter 3 combines everything together into a theoretical model in which policy-makers can allocate a given amount of tax revenue between direct provision of a public good and influencing norms to try to increase private provision. An analytical analysis of efficiency and a simulation analysis of welfare effects are conducted. Depending upon individual preferences over private good consumption, public good consumption, and image, a positive investment in norm manipulation can increase social welfare.