Inherited Patience and the Taste for Environmental Quality

Abstract

Environmental-quality and environmental-protection actions vary worldwide. Investing in environmental quality often involves intertemporal trade-offs, with present costs and future rewards. A growing body of literature finds that patience, a measure of time preference, is positively associated with pro-environmental policies, attitudes, and behaviors. However, much of this work relies on contemporaneous measures of patience that may be jointly determined with environmental attitudes, and thus may give rise to spurious correlations, calling the validity of these results into question. This paper contributes to the discussion on the determinants of environmental quality by addressing this methodological concern. We propose an individual measure of patience in the form of inherited cultural values, which is derived from information on the countries of origin of an individual’s parents. We argue that this inherited-patience measure is plausibly an exogenous event in an individual’s life. Using this measure, we find a strong, positive relationship between inherited patience and concern for the environment. Our results are robust to the inclusion of variables reflecting an individual’s demographic and socioeconomic status, religious identity, trust, political ideology, and location, as well as period and country fixed effects.

1. Introduction

Environmental quality differs significantly across the world. According to the Environmental Performance Index values for the year 2022 [1], countries in the global West were the most environmentally friendly in terms of climate-change performance, environmental health, and ecosystem validity. Denmark presented the highest level of environmental performance followed by the United Kingdom and Finland. The United States ranked 20th out of 22 wealthy democracies in the global West and 43rd worldwide; and India ranked the lowest among the 180 countries after Vietnam, Bangladesh, and Pakistan. By examining the factors that play a role in a society’s attitudes towards the environment, we can better understand why some countries are leading the way towards sustainability while other are not.

Fundamental factors of environmental quality include the taste for environmental quality, the determinants of the opportunity cost of environmental regulation, including the level of economic development and the pattern of international trade, as well as a country’s fundamental institutional framework, such as the levels of democracy, rule of law, and legal origin [1,2,3,4,5,6,7,8]. The taste for environmental quality, in turn, has been shown to depend on a country’s cultural heritage (e.g., [9]), including its religious heritage, which is understood to affect fundamental attitudes toward the natural world.

A key aspect of many policies designed to improve the environment is that the costs and benefits of these policies occur at different points in time. This is true, for example, of carbon taxes, which, by increasing the cost of CO₂ emissions, are designed to reduce the rate of climate change, the subsidies to green-innovation projects, and recycling. Each of these policies involve significant initial costs, while their environmental benefits will be experienced only at some, often indefinite, point in the future. Supporting environmental protection is likely to be an indicator of a high taste for environmental quality, as protecting the environment can have a prominent opportunity cost. In this context of the intemporal nature of enacting polices to protect the environment, this paper contributes to the literature investigating the relationship between the taste for environmental quality and an individual’s rate of time preference (i.e., patience). The greater the weight an individual places on future utility, the more willing they will be to bear current costs in exchange for future environmental benefits. As a result, we expect the taste for environmental quality to be higher among more patient individuals.

We investigate this relationship using data from the European Social Survey (ESS), which consists of a series of representative national surveys conducted biennially since 2001 for a set of mostly European countries, and addresses a broad set of attitudes, values, and beliefs, including information on the taste for environmental quality. For our purposes, a particular advantage of using the ESS is that it provides information on the countries of origin of a respondent’s parents. This allows us to construct an individual-level measure of inherited patience based on the country-level measure of patience from the Global Preference Survey (GPS), described in Falk et al. [10]. The use of inherited cultural values, an empirical strategy popularized by Guiso, Sapienza, and Zingales [11] and Fernández [12], and broadly employed in the literature on the economics of culture, avoids complications due to the endogeneity of values. In our case, the proposed measure of inherited patience avoids complications concerning the potential codetermination of patience and the taste for environmental quality at the individual level, and hence, provides greater confidence in the validity of our empirical findings. This constitutes our main contribution to the literature.

Our findings indicate a robust, positive, and plausibly causal relationship between inherited patience and the taste for environmental quality. In our baseline regression, a one standard-deviation increase in inherited patience is associated with a 3.5% standard deviation increase in the taste for environmental quality, which is roughly the same as a 5.5-year increase in age or 38% of the association between gender and the taste for environmental quality. This relationship is robust to the inclusion of a wide variety of controls, including a broad set of demographic and socioeconomic characteristics, measures of religious identity, social and political trust, and political ideology, and a set of controls for rural–urban location, and subnational regional fixed effects.

Our findings contribute to a small amount of literature on the relationship between patience and environmental outcomes. Applying Chen’s [13] work linking grammar to the rate of time preference to an environmental context, Mavisakalyan, Tarverdi, and Weber [14] find that countries where the dominant language marks the future tense, an indication of impatience, implement less stringent global-warming policies. More recently, using the patience measure at the country level from the Global Preference Survey, Cai et al. [15] support the conclusion that future-oriented societies are more likely to adopt environmental policies. They find that patience is positively associated with an index of policies and institutions designed to mitigate climate change. In addition, a number of studies investigate the relationship between individual-level measures of patience, elicited using survey methods, and environmental behaviors. For example, Furhmann-Riebel, D’Exelle and Verschoor [16] find that patience is associated with several pro-environmental behaviors among urban middle-class households in Peru. More-patient individuals show higher levels of sustainable plastics consumption and have a lower spending on electricity per month. Similarly, Newell and Siikamäki [17] show that individual discount rates affect environmental behaviors related to energy efficiency among US households, and Fuerst and Singh [18] find that present bias reduces the likelihood that a household invests in energy-efficient appliances in India. Finally, Lades, Laffan and Weber [19] recruited participants via an online survey to investigate the relationship between economic preferences and environmental behavior in the United Kingdom. In contrast with other studies in this area, Lades et al. do not find that patience is systematically related to pro-environmental behaviors.

Our findings are consonant with the majority of these previous studies, which find a positive relationship between patience and environmental behaviors, attitudes, and policies. However, our approach to this topic differs from that of the existing literature in that we employ an individual-level measure of inherited patience. This has benefits over the two approaches commonly used in the existing literature. First, by employing an individual-level measure of patience, we are able to control for country fixed effects and, thus, for the impact of a host of omitted economic, institutional and cultural factors that might affect environmental outcomes at the national level. Due to limited sample size, concerns over omitted variable bias cannot be fully addressed in country-level studies. Second, existing work that employs individual-level measures of patience relies on contemporaneous measures of patience derived from survey data, which may be codetermined with environmental attitudes. In contrast, inherited patience is plausibly exogenous to events in an individual’s life and thus to shocks that may also influence environmental behaviors. This distinction makes it more likely that we identify causal effects.

Somewhat more broadly, our work contributes to the literature on the determinants of environmental attitudes. Environmental attitudes have been found to depend on a wide variety of factors, including demographics such as an individual’s age, gender, and income level [20,21,22], as well as their understanding of environmental issues [23] and understanding of the costs and benefits of environmental policy [24]. An early start for environmental education is found critical, too, for children to develop a positive attitude toward the environment [20]. In addition, cultural factors such as religious heritage and beliefs can drive environmental attitudes. For example, Arbuckle and Konisky [25] and Konisky [26] show that Christian denominations exhibit lower environmental concern.

Finally, we also contribute to a growing empirical literature on the economic consequences of patience, which has been found to affect long-run economic growth [27], human-capital accumulation [28], entrepreneurship [29], charitable contributions [30], various behavioral biases [31], or crop yields in the agricultural transition [32].

2. Materials and Methods

2.1. Materials

Our empirical analysis is based on data from two sources, the European Social Survey (ESS) and the Global Preference Survey (GPS).

The ESS consists of a series of nationally representative surveys of up to 38 primarily European countries regarding social attitudes, beliefs and values on a wide range of topics. It has been conducted every two years, beginning in 2001. From this dataset we take our dependent variable, which is a measure of environmental attitudes, and is interpreted as an indicator of an individual’s taste for environmental quality. The ESS survey question we use asks respondents how much they are like a person who “strongly believes that people should care for nature. Looking after the environment is important to her/him”. Possible answers range from (1) “very much like me” to (6) “not like me at all”, and are reordered for our analysis so that the resulting variable, Envir, is increasing in the taste for environmental quality. In addition, we use a series of variables from the ESS regarding an individual’s demographic and socioeconomic characteristics, religion, political ideology and social trust, as well as their national and subnational location.

The GPS is employed to construct an individual measure of patience, which is our key independent variable. As described in detail in Falk et al. [10,33], the GPS is the result of a collection of national surveys in 2012 that are used to construct national measures of economic preferences for a broad sample of countries. The GPS survey provides two measures of patience, one at the individual level for each participant in the survey, and one at the country level for each of the countries in which the survey was conducted. The GPS variable for individual patience is designed to reflect how willing people are to wait for something when there is no immediate reward, and combines information from qualitative and quantitative measures. The qualitative measure of patience is obtained by having participants in the survey rate their willingness to wait on an 11-point Likert scale. The question being asked is: “How willing are you to give up something that is beneficial for you today in order to benefit more from that in the future?” The quantitative measure is obtained through a staircase procedure, in which respondents may choose between a combination of “hypothetical binary choices between immediate and delayed financial rewards” ([10], p. 1654). The country-level variable for patience is a weighted average of these two measures for respondents in each country, and is available for 76 countries.

To construct an individual-level measure of patience to be used as a key independent variable for our empirical analysis, which we call inherited patience, we average the GPS country-level patience measures for the birth countries of each ESS respondent’s mother and father (maternal patience and paternal patience, respectively). In one specification, we consider maternal and paternal patience separately, in order to provide evidence on channels of cultural transmission. Using a measure of inherited patience allows us to avoid complications associated with the endogeneity of values and, in particular, with the possible codetermination of an individual’s patience and their environmental attitudes.

In a highly cited and influential paper, Guiso, Sapienza, and Zingales [11] provide an approach to analyzing the role of culture in economic outcomes that serves as the primary motivation for the empirical strategy employed here. The centerpiece of their approach is to focus analytical attention on the inherited component of cultural values. As Guiso et al. ([11], p. 23, emphasis in the original), argue: “A necessary first step is to define culture in a sufficiently narrow way, so that it becomes easier to identify a causal link from culture to economic outcomes. For this reason, we define culture as those customary beliefs and values that ethnic, religious, and social groups transmit fairly unchanged from generation to generation”. Their focus on inherited cultural values addresses a central concern in the economics of culture, the ability to convincingly identify causal effects: “All work on culture and economics faces the problem that causality is likely to work both ways—from culture to economics and from economics to culture. The above definition of culture suggests an answer: to focus only on those dimensions of culture that are inherited by an individual from previous generations, rather than voluntarily accumulated.” (p. 24).

This argument highlights our critique of the existing literature on patience and environmentalism, much of which relies on contemporaneous measures of patience that arguably reflect, in part, an individual’s life experience, and may be codetermined with environmental attitudes. It also serves to motivate the use of inherited culture, which serves as a plausibly exogenous component of an individual’s cultural values, and can, thus, be used to identify the causal effect of patience on the taste for environmental quality.

Table 1. Summary Statistics.

Variable	Description	Observation	Mean	Std. Dev.	Min	Max
Dependent variable
Envir	Measure of individual environmental attitudes on an increasing scale in the taste for environmental quality, from 1 to 6	241,548	4.878	1.035	1	6
Key independent variable
Inherited patience	Measure of individual-level of patience calculated as the average between maternal- and paternal-patience measures	241,548	0.266	0.411	−0.606	1.071
Maternal patience	Country-level-patience measure for mother’s country of origin	241,548	0.267	0.414	−0.606	1.071
Paternal patience	Country-level-patience measure for father’s country of origin	241,548	0.265	0.414	−0.606	1.071
Demographics
Age	Age	240,875	48.446	18.769	14	105
Female	Gender: 0 = Male, 1 = Female	241,548	0.543	0.498	0	1
Endogenous controls
Home population	Number of people living regularly in household	241,313	2.658	1.406	1	22
Marital status	Marital status: 1 = Married, 2 = Separated, 3 = Divorced, 4 = Widow, 5 = Never married	234,999	2.675	1.786	1	5
Education	Years of education completed	239,105	12.249	4.091	0	60
Income	Total household net income (after tax and compulsory deductions) by decile	183,008	5.427	2.748	1	10
Unemployed	Ever unemployed for more than 3 months: 0 = No, 1 = Yes	241,548	0.264	0.441	0	1
Cultural control
Religion	Religion affiliation: 0 = None, 1 = Catholic, 2 = Protestant, 3 = Orthodox, 4 = Other Christian, 5 = Other religion	234,377	1.116	1.349	0	5
Values/beliefs controls
Trust people	Trust in people on a scale from 0 = You can’t be too careful to 10 = Most people can be trusted	240,801	4.950	2.426	0	10
Trust parliament	Trust in country’s parliament on a scale from 0 = No trust at all to 10 = Complete trust	235,826	4.248	2.590	0	10
Right-wing	Self-placement on political views on a left–right scale from 0 = Left to 10 = Right	207,362	5.149	2.213	0	10
Locational/time controls
Domicile	Type of living area: 1 = Big city, 2 = Suburb, 3 = Town, 4 = Village, 5 = Countryside	241,084	2.849	1.207	1	5
Region	Subnational-EU region of residence	150,930	216.520	125.757	1	443
Country	Country of residence	241,548	15.981	9.013	1	33
Period	ESS round	241,548	5.466	2.254	2	9

shows the description and the summary statistics for all variables. Our sample consists of 241,548 observations and is primarily limited by three factors. First, our sample is taken from rounds 2–9 of the ESS (biannually, from 2004 to 2018), as data on the birth country of a respondent’s parents is first available in round 2. Second, due to limited overlap between the countries covered in the ESS and GPS, our sample consists of individuals for whom the inherited patience can be computed, residing in 33 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, Slovakia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and Ukraine. Third, in order to ensure the respondents in each country were exposed to the same educational, institutional and economic systems, we restrict the sample respondents to those born in their current country of residence.

2.2. Methods

Our research hypothesis on the relationship between patience and taste for environmental quality is that a higher level of individual inherited patience is associated with a higher level of individual environmental attitudes. To test this hypothesis, we estimate a series of ordinary-least-squares (OLS) regression models that take the form

$$Envi{r}_{ict}={\beta }_{1}Inherited Patienc{e}_i+{\beta }_2{X}_i+{\gamma }_c+{\gamma }_t+{\epsilon }_{ict}$$

(1)

where i, c and t index individuals, countries and time, respectively, $Envi{r}_{itc}$ measures an individual’s taste for environmental quality, $Inherited Patienc{e}_i$ is the focal independent variable, reflecting individual i’s inherited patience, and $X_i$ is a vector of control variables that previous studies suggest may affect an individual’s taste for environmental quality. Our specification also includes country fixed effects, ${\gamma }_c$, which control for the impact of unobserved country-level variables, including the level of economic development, resource endowments, national policies, institutions and social norms that may influence the taste for environmental quality. Similarly, period fixed effects, ${\gamma }_t$, control for global shocks to the taste for environmental quality associated with the period in which the ESS round was conducted. The key coefficient of interest here is ${\beta }_1$, which captures the effect of inherited patience on the taste for environmental quality. As noted earlier, inherited patience is expected to increase an individual’s taste for environmental quality, so we expect ${\beta }_1$ to be positive. Following this baseline equation, we estimate 8 models, gradually adding control regressors as robustness tests to check the sensitivity of coefficients on our key independent variable of inherited patience.

In our empirical strategy, the relationship between inherited patience and the taste for environmental quality is identified by the presence of second-generation immigrants in each country, e.g., respondents whose parents were born outside their current country of residence. It is these individuals who provide some variation in inherited patience within each country.

Figure 1 presents a step-by-step description of our empirical methodology, from the data-collection process through the regression analysis.

3. Results and Discussion

Table 2. Inherited-Patience and the Taste-for-Environmental-Quality Regression Results.

Envir	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Inherited patience	0.0883 ***	0.0788 ***	0.106 ***	0.0668 ***	0.0748 ***	0.0739 ***	0.0987 ***
	(4.334)	(3.390)	(4.440)	(2.849)	(3.140)	(3.173)	(3.595)
Maternal patience								0.0457 *
								(1.805)
Paternal patience								0.0335
								(1.387)
Age	0.00659 ***	0.00881 ***	0.00859 ***	0.00875 ***	0.00902 ***	0.00878 ***	0.00884 ***	0.00881 ***
	(59.03)	(45.21)	(43.23)	(44.51)	(43.91)	(45.02)	(36.81)	(45.21)
Female	0.0941 ***	0.101 ***	0.0979 ***	0.103 ***	0.100 ***	0.102 ***	0.110 ***	0.101 ***
	(22.65)	(20.68)	(19.69)	(20.88)	(19.59)	(20.79)	(18.23)	(20.68)
Endogenous Controls		YES	YES	YES	YES	YES	YES	YES
Religion FE			YES
Trust people				0.0130 ***
				(11.60)
Trust parliament				0.00233 **
				(2.203)
Rightwing					−0.0219 ***
					(−18.95)
Domicile FE						YES
Regional FE							YES
Country FE	YES	YES	YES	YES	YES	YES		YES
Period FE	YES	YES	YES	YES	YES	YES	YES	YES
Constant	4.464 ***	4.181 ***	4.139 ***	4.133 ***	4.304 ***	4.181 ***	5.034 ***	4.181 ***
	(256.8)	(158.1)	(150.9)	(152.4)	(153.0)	(155.2)	(7.179)	(158.0)
Observations	240,875	176,326	171,598	172,880	156,803	176,079	115,001	176,326
R-squared	0.044	0.053	0.054	0.054	0.055	0.053	0.072	0.053

Notes: T-statistics in parentheses. Asterisks indicate statistical significance: *** p < 0.01, ** p < 0.05, * p < 0.1. Endogenous controls include household size, educational attainment, marital status, household income, and employment status. All regressions control for country and period fixed effects. The final row of the table provides evidence on the overall fit of each model.

presents our regression results. In the initial specification (1), we regress the taste for environmental quality on inherited patience, an individual’s exogenous demographic characteristics (i.e., age, gender), and country and period fixed effects. We find that the coefficient on inherited patience is positive and statistically significant at the 1-percent level. The coefficients on age and female are also positive and significant, consistent with findings in previous studies [20,21]. The point estimate for beta-1 in our baseline specification indicates that a one-standard-deviation increase in inherited patience increases the taste for environmental quality by 3.5% of a standard deviation. This is roughly the same as a 5.5-year increase in an individual’s age or 38% of the impact of being female.

Next, in model (2), we expand the baseline model to control for a variety of socioeconomic variables that are plausibly related to the taste for environmental quality, including household size, a vector of indicators for marital status, level of educational attainment in number of years of education, household total net income, and a dummy variable for employment status. Note that these socioeconomic indicators are also potentially endogenous to patience, so this specification may suffer from over-controlling, which could bias the coefficient estimate. As seen in column (2), the inclusion of these variables has at most a modest effect on our results. The coefficient on inherited patience remains both positive and highly significant, and its magnitude is largely unchanged.

While these specifications control for country fixed effects, and thus for the influence of omitted national-level variables related to cultural values and social norms, it remains possible that inherited patience is correlated with unobserved individual-level variation in values or beliefs that might exert an independent effect on the taste for environmental quality. If so, then our initial findings may be spurious. This concern is heightened by the key role of intergenerational transmission in the formation of an individual’s values and beliefs (e.g., [34,35]).

Our next three specifications address this concern by including three different types of variables as robustness tests related to religion, trust and political ideology. First, given the strong association between religion and the taste for environmental quality (e.g., [25,26], and the fact that an individual’s religious identity is strongly influenced by their parents’ religious identity and beliefs, it is possible that our findings are spurious, reflecting the relationship between religion and patience. We address this concern by including in model (3) a vector of dummy variables that control for an individual’s religious affiliation, as Protestant, Catholic, Orthodox, other Christian, other religions, or non-religious. Second, we consider the potentially confounding role of trust in the taste for environmental quality. Not only may trust increase the taste for environmental quality (e.g., [36,37], but, as noted by Cai et al. [15] patience may increase social cooperation, including different dimensions of trust. We address this issue by augmenting our baseline model to include measures of social and political trust, in model (4). Finally, it may be that our results reflect the relationship between patience and (left-leaning) political ideology. We address this concern by controlling for a measure of political ideology in model (5).

Our results, shown in columns (3)–(5), indicate that the relationship between inherited patience and the taste for environmental quality is robust to these specifications. These findings provide no evidence that the relationship between patience and the taste for environmental quality is driven by the omission of individual-level measures of values and beliefs.

In addition, we run models (6) and (7) to control for two variables intended to reflect subnational variation in an individual’s location. As noted in the discussion of our methodology, our findings are effectively driven by cultural variation among second-generation immigrants within each country. This raises the possibility that our results may be biased if immigrant groups are distributed unevenly across space within each country. Residence in a particular location may influence an individual’s taste for environmental quality, due its association with resource extraction, economic reliance on dirty industries, or access to environmental goods. We control for this in two ways. First, we add a set of dummy variables, (domicile FE), which reflect the degree of urbanization of an individual’s residential location, which we consider a rough proxy for reliance on resource-extractive activities. Second, we include a series of subnational regional dummy variables (regional FE), which control for regional variation in reliance on dirty industries, as well as other unobserved regional-level variables that affect the taste for environmental quality. As seen in columns (6) and (7), the relationship between inherited patience and the taste for environmental quality is robust to the inclusion of these controls.

Finally, in our last specification, we attempt to separately identify the channel of intergenerational cultural transmission by including separate measures of maternal and paternal patience. As seen in column (8), however, both coefficients are of similar size, and neither is precisely estimated. Thus, our results fail to provide evidence on the primary channel of transmission for parental patience.

Hence, overall, our results provide robust evidence to support the hypothesis that inherited patience increases the demand for environmental quality.

4. Conclusions

This paper supports the hypothesis that patience increases the taste for environmental quality. This is consistent with the idea that patient individuals are more willing to bear greater current costs in exchange for future environmental benefits. We demonstrate a strong and robust positive relationship between inherited patience, in the form of inherited cultural values, and environmental attitudes. This finding is robust to the inclusion of a variety of controls, including demographics, socioeconomic variables, measures of religion, trust and political ideology, urbanization, and subnational regional effects. These results are broadly consistent with those in the existing literature [15,16,17,18] which find a positive relationship between patience and related measures of time preference and pro-environmental policies and behaviors. Relative to the existing literature, however, our use of a measure of inherited patience, which is plausibly exogenous to events in an individual’s life that might simultaneously affect environmentalism, places our findings on a stronger econometric footing.

Our findings suggest that strategies to increase support for environmental policies may be more successful if they are sensitive to variations in patience across individuals and societies. In particular, it may be important to stress the current or near-term benefits to these policies in less-patient societies. In terms of future research, our methodological approach, which focuses on identifying the exogenous, inherited component of an individual’s cultural values and exploits variation in inherited values among second-generation immigrants, may be profitably applied to a wide range of questions regarding the relationship between cultural values and environmental policies, attitudes, and beliefs.