IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v118y2013i2p397-416.html
   My bibliography  Save this article

How do people update? The effects of local weather fluctuations on beliefs about global warming

Author

Listed:
  • Tatyana Deryugina

Abstract

Global warming has become a controversial public policy issue in spite of broad scientific consensus that it is real and that human activity is a contributing factor. It is likely that public consensus is also needed to support policies that might counteract it. It is therefore important to understand how people form and update their beliefs about climate change. Using unique survey data on beliefs about the occurrence of the effects of global warming, I estimate how local temperature fluctuations influence what individuals believe about these effects. I find that some features of the updating process are consistent with rational updating. I also test explicitly for the presence of several heuristics known to affect belief formation and find strong evidence for representativeness, some evidence for availability, and no evidence for spreading activation. I find that very short-run temperature fluctuations (1 day–2 weeks) have no effect on beliefs about the occurrence of global warming, but that longer-run fluctuations (1 month–1 year) are significant predictors of beliefs. Only respondents with a conservative political ideology are affected by temperature abnormalities. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Tatyana Deryugina, 2013. "How do people update? The effects of local weather fluctuations on beliefs about global warming," Climatic Change, Springer, vol. 118(2), pages 397-416, May.
    • Handle: RePEc:spr:climat:v:118:y:2013:i:2:p:397-416
    DOI: 10.1007/s10584-012-0615-1
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10584-012-0615-1
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10584-012-0615-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Holt, Charles A. & Smith, Angela M., 2009. "An update on Bayesian updating," Journal of Economic Behavior & Organization, Elsevier, vol. 69(2), pages 125-134, February.
    2. Nicolosi, Gina & Peng, Liang & Zhu, Ning, 2009. "Do individual investors learn from their trading experience?," Journal of Financial Markets, Elsevier, vol. 12(2), pages 317-336, May.
    3. Lei Feng & Mark Seasholes, 2005. "Do Investor Sophistication and Trading Experience Eliminate Behavioral Biases in Financial Markets?," Review of Finance, Springer, vol. 9(3), pages 305-351, September.
    4. David M. Grether, 1980. "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(3), pages 537-557.
    5. Lei Feng & Mark S. Seasholes, 2005. "Do Investor Sophistication and Trading Experience Eliminate Behavioral Biases in Financial Markets?," Review of Finance, European Finance Association, vol. 9(3), pages 305-351.
    6. Gary Charness & Dan Levin, 2005. "When Optimal Choices Feel Wrong: A Laboratory Study of Bayesian Updating, Complexity, and Affect," American Economic Review, American Economic Association, vol. 95(4), pages 1300-1309, September.
    7. Jonathan E. Alevy & Michael S. Haigh & John A. List, 2007. "Information Cascades: Evidence from a Field Experiment with Financial Market Professionals," Journal of Finance, American Finance Association, vol. 62(1), pages 151-180, February.
    8. Lawrence Hamilton, 2011. "Education, politics and opinions about climate change evidence for interaction effects," Climatic Change, Springer, vol. 104(2), pages 231-242, January.
    9. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
    10. Trudy Cameron, 2005. "Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change," Journal of Risk and Uncertainty, Springer, vol. 30(1), pages 63-97, January.
    11. Olivier Deschênes & Michael Greenstone, 2011. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 152-185, October.
    12. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, January.
    13. Terrell, Dek, 1994. "A Test of the Gambler's Fallacy: Evidence from Pari-mutuel Games," Journal of Risk and Uncertainty, Springer, vol. 8(3), pages 309-317, May.
    14. B. Dan Wood & Arnold Vedlitz, 2007. "Issue Definition, Information Processing, and the Politics of Global Warming," American Journal of Political Science, John Wiley & Sons, vol. 51(3), pages 552-568, July.
    15. Gary Charness & Edi Karni & Dan Levin, 2007. "Individual and group decision making under risk: An experimental study of Bayesian updating and violations of first-order stochastic dominance," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 129-148, October.
    16. John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 41-71.
    17. Ravi Dhar & Ning Zhu, 2006. "Up Close and Personal: Investor Sophistication and the Disposition Effect," Management Science, INFORMS, vol. 52(5), pages 726-740, May.
    18. Paul M. Kellstedt & Sammy Zahran & Arnold Vedlitz, 2008. "Personal Efficacy, the Information Environment, and Attitudes Toward Global Warming and Climate Change in the United States," Risk Analysis, John Wiley & Sons, vol. 28(1), pages 113-126, February.
    19. Grieco, Daniela & Hogarth, Robin M., 2009. "Overconfidence in absolute and relative performance: The regression hypothesis and Bayesian updating," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 756-771, October.
    20. Sendhil Mullainathan, 2002. "A Memory-Based Model of Bounded Rationality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 735-774.
    21. Matthew Wiswall & Basit Zafar, 2011. "Belief updating among college students: evidence from experimental variation in information," Staff Reports 516, Federal Reserve Bank of New York.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bachmann, Kremena, 2024. "Do you have a choice?: Implications for belief updating and the disposition effect," Journal of Economic Psychology, Elsevier, vol. 102(C).
    2. Peiran Jiao, 2015. "Losing from Naive Reinforcement Learning: A Survival Analysis of Individual Repurchase Decisions," Economics Series Working Papers 765, University of Oxford, Department of Economics.
    3. Philipp Stephan & Rüdiger Nitzsch, 2013. "Do individual investors’ stock recommendations in online communities contain investment value?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 27(2), pages 149-186, June.
    4. Lukas Menkhoff & Maik Schmeling & Ulrich Schmidt, 2010. "Are All Professional Investors Sophisticated?," German Economic Review, Verein für Socialpolitik, vol. 11(4), pages 418-440, November.
    5. Peiran Jiao, 2015. "The Double-Channeled Effects of Experience on Individual Investment Decisions: Experimental Evidence," Economics Series Working Papers 766, University of Oxford, Department of Economics.
    6. Hayley, Simon & Marsh, Ian W., 2016. "What do retail FX traders learn?," Journal of International Money and Finance, Elsevier, vol. 64(C), pages 16-38.
    7. Xu, Rong & Liu, Yaodong & Hu, Nan & Guo, Jie (Michael), 2022. "What drives individual investors in the bear market?," The British Accounting Review, Elsevier, vol. 54(6).
    8. Maximilian Koestner & Benjamin Loos & Steffen Meyer & Andreas Hackethal, 2017. "Do individual investors learn from their mistakes?," Journal of Business Economics, Springer, vol. 87(5), pages 669-703, July.
    9. Camille Magron & Maxime Merli, 2012. "Stocks repurchase and sophistication of individual investors," Working Papers of LaRGE Research Center 2012-02, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    10. Glaser, Markus & Weber, Martin, 2007. "Why inexperienced investors do not learn: They do not know their past portfolio performance," Finance Research Letters, Elsevier, vol. 4(4), pages 203-216, December.
    11. Oscar A. Stolper & Andreas Walter, 2017. "Financial literacy, financial advice, and financial behavior," Journal of Business Economics, Springer, vol. 87(5), pages 581-643, July.
    12. John A. List, 2011. "Does Market Experience Eliminate Market Anomalies? The Case of Exogenous Market Experience," American Economic Review, American Economic Association, vol. 101(3), pages 313-317, May.
    13. Dmitri Boreiko & Dimche Risteski, 2021. "Serial and large investors in initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 1053-1071, August.
    14. Giné, Xavier & Goldberg, Jessica, 2023. "Experience in financial decision-making: Field evidence from Malawi," Journal of Development Economics, Elsevier, vol. 161(C).
    15. Duxbury, Darren & Hudson, Robert & Keasey, Kevin & Yang, Zhishu & Yao, Songyao, 2015. "Do the disposition and house money effects coexist? A reconciliation of two behavioral biases using individual investor-level data," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 34(C), pages 55-68.
    16. Gregor Dorfleitner & Lars Hornuf & Martina Weber, 2023. "Paralyzed by shock: the portfolio formation behavior of peer-to-business lending investors," Review of Managerial Science, Springer, vol. 17(3), pages 1037-1073, April.
    17. Wenjun Wang, 2023. "Can experience mitigate precautionary bidding? Evidence from a quasi-experiment at an IPO auction," Journal of Asset Management, Palgrave Macmillan, vol. 24(2), pages 148-163, March.
    18. Chan, Kalok & Wang, Baolian & Yang, Zhishu, 2019. "Why investors do not buy cheaper securities: Evidence from a natural experiment," Journal of Banking & Finance, Elsevier, vol. 101(C), pages 59-76.
    19. Chiang, Yao-Min & Hirshleifer, David & Qian, Yiming & Sherman, Ann, 2009. "Learning to Fail? Evidence from Frequent IPO Investors," MPRA Paper 16854, University Library of Munich, Germany, revised Aug 2009.
    20. Markus Glaser & Thomas Langer & Martin Weber, 2007. "On the Trend Recognition and Forecasting Ability of Professional Traders," Decision Analysis, INFORMS, vol. 4(4), pages 176-193, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:118:y:2013:i:2:p:397-416. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.