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The role of loss aversion in shaping environmental relocation decisions

Author

Listed:
  • Jiakun Zheng

    (Aix Marseille Univ, CNRS, AMSE, Centrale Marseille, Marseille, France.)

  • Yanyin Li

    (School of Finance, Renmin University of China)

Abstract

This paper utilizes data from the 2017 China Household Finance Survey (CHFS) to examine the impact of loss aversion on individuals' willingness to relocate due to environmental concerns. We find that individuals who are more loss averse are less likely to consider moving, resulting in what is called the status-quo bias. In addition, we find that individuals with stronger family ties as measured by the number of siblings and higher household fixed assets are more susceptible to these effects, implying that they are more attached to their current place of residence and less likely to relocate.

Suggested Citation

  • Jiakun Zheng & Yanyin Li, 2024. "The role of loss aversion in shaping environmental relocation decisions," Economics Bulletin, AccessEcon, vol. 44(4), pages 1263-1270.
    • Handle: RePEc:ebl:ecbull:eb-23-00318
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    File URL: http://www.accessecon.com/Pubs/EB/2024/Volume44/EB-24-V44-I4-P99.pdf
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    More about this item

    Keywords

    Loss aversion; Willingness to relocate; Family ties; Status-quo bias.;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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