The Effect of Gain-loss Framing on Climate Policy Preferences

We designed a discrete choice experiment testing valence-based framing of climate policy outcomes for future generations, a moral good involving altruistic trade-offs. Specifically, we explore how a gain and loss framing influence social preferences for the distributional outcomes of climate policy. Respondents are asked to consider climate policy alternatives with two main outcomes affecting three regions of the world: Income effects for future generations caused by climate change, which the respondents may not be affected by, and a present generation co-benefit from mitigation efforts, which could benefit the respondents directly. Using a sample of the Danish population, we find a significant difference in the estimated preference structure for climate policies when future income effects are framed as losses in income for future generations relative to when framed as regained income. However, the welfare measures reveal that the framing did not generate significantly higher value estimates for the framed income effect attribute. Instead, the framing resulted in increased willingness to pay for additional climate policy initiatives per se, and higher value estimates for the unframed, present generation co-benefit. We interpret these results drawing on the behavioural science and economic literature on framing and reference point dependent preferences.