Revealed Preference Regarding Climate Change

Update: I’ve tweaked this post a lot, which is unusual for me–if anybody re-reads this I hope that you don’t find the changes unsettling.

In market research you learn to trust but verify. People will give you their honest opinions usually (unless you’re talking about their sex life or their bank balance), but their honest opinions may actually be their perception of what they should be saying. If they say they like a brand of cereal, they probably do–but if you ask them why, you often get rationalizations rather than rationality. People will invent logical reasons for their preferences that make them sound like better people, when it’s possible they like the cereal based on a forgotten childhood association or the attractiveness of the person featured in the cereal ads.

If you ask someone which brand of cereal they will buy on their next shopping trip they will state their preference. If you peek into their shopping bag when they get home from the store it will reveal their preference. Much more frequently than you might expect there is a difference between stated and revealed preferences. (Economists have an entirely different discussion about revealed preferences that sometimes, but not always, refers to the real world.)

What’s interesting is that people believe these after-the-fact rationalizations and dispute the real motivations for what they like or dislike, even when confronted with evidence to the contrary using tools like choice modelling. Justifying what you believe is a common trait–so too is an automatic defense of your justifications. (If you haven’t yet read ‘Thinking Fast and Slow,’ you should–it covers a lot of this as well as many other interesting topics.)

People talk a lot about the magnitude of climate change–how it could be disastrous, how we need to change our lives to prevent it.

However, their behaviour does not always correspond with what they say their beliefs actually are. This shouldn’t surprise those of us in market research–it happens a lot. And it isn’t anything as easy to categorize as garden variety hypocrisy. People have real trouble connecting their stated beliefs with what their choices reveal about their preferences.

We see it within the climate change establishment–climate scientists will say that they need to fly and admit that their carbon footprint is huge. They give what are logical sounding reasons: one person’s carbon footprint can’t make a difference, the work they are doing is so valuable it outweighs their emissions, their careers depend on face to face interactions, etc. But their choices reveal their preferences.

This hit home to me this morning as I read an article in Nation (I keep telling you I’m a leftist–when will you start believing me?) about the difficulty one woman had in reconciling her fears about climate change with her growing desire to have a child.

The article is “How Do You Decide To Have A Baby When Climate Change Is Remaking Life On Earth?”

The premise alone should tell us all how much life has already changed on Earth. Historically, difficult times spurred increases in women giving birth, so much so that scientists postulated that it was an instinctive reaction–having more babies in times of trouble increased the chances that some would survive, perpetuating the bloodline and winning the evolutionary race to pass on your genes. This goes in an entirely different direction.

The author writes, “ In 1970, the biologist Paul Ehrlich leaned over a podium at Northwestern University and declared, “The American woman of the year is the sterile woman who adopts two children.” It was the beginning of a half-century of ambivalence among environmentalists over the nature of motherhood.”

Hey–my sister adopted two kids and had none of her own–can I nominate her?

Paul Ehrlich is the father of Lisa Marie Ehrlich.

The author writes, “ According to scientists’ predictions, if society keeps pumping out carbon dioxide at current rates, any child born now could, by midlife, watch Superstorm Sandy–size disastersregularly inundate New York City. She could see the wheat fields of the Great Plains turn to dust and parts of California gripped by decades of drought. She may see world food prices soar and water in the American West become even scarcer. By 2050, when still in her 30s, she could witness global wars waged over food and land. “It does make me wonder if maybe I shouldn’t have kids,” one of my friends whispered to me. A year later, she was pregnant. What had changed her mind?”

The author herself finally gets pregnant, although sadly miscarries.

We might look at how stating her fears about climate change related to bringing a baby in this world wins her acclaim as both a prospective mother and an environmentally aware person. We might look at it as a fight against the evolutionary imperative to reproduce. We might look at it as the changing dynamic brought about by the ticking of the biological clock, or by moderating influences of ongoing education about the environmental impacts of climate change. No shortage of possible explanations to explore. Heck, maybe she just flipped a coin and changed her mind. If you think making a decision is tough, wait until you have to explain someone else’s.

Seen through the lens of the modern conversation about climate change, these stories show the ambivalence attending our concerns over something that will take generations to make itself evident–unless you believe the over-hyped claims of those who see Xtreme Weather trailing in every cloud.

But there are other lenses we can use to examine this–my experience in market research shields me from being surprised by the disconnect between what people say and what they do. Much of market research stems from sociology, which in turn was kick-started by social anthropologists, and both disciplines can shed light on this.

Of course, you can use simpler world views to look at it. Skeptics can hark back to the hypocrisy meme, while activists might focus on the reduction in the number of children born to each female. And one or both of them may be right.

The change that this might point to is simple: Climate activists have largely dismissed the thought of individual actions to mitigate climate change, much to the distress of people like Paul Kelly and myself. But this leads to an unfortunate tendency for people to collect the kudos for caring about climate change without any additional incentive to act on their stated preferences. All the kudos are front-loaded into accepting the establishment’s beliefs. And that could explain (partly) why climate change scores high on acceptance but low on priority.

This type of analysis may provide an adequate (if somewhat cynical) explanation to the conundrum of majorities accepting climate science and its existence as a problem with their pattern of placing it very low on the list of priority tasks to address. They get all of the social credit there is to be had by acknowledging climate change and lose no societal status by addressing other problems first. People are complex and decision-making is more so–there may be many other factors involved.

One counter-intuitive thought inspired by stated vs. revealed preferences. Much of the climate establishment thinks that if people accept climate change they will act on it (in their view, supporting activist policy). But as I just mentioned, that may not happen.

What if it’s the reverse? What if having people act in a manner consonant with lower emissions, adaptation and general respect for the environment is the way to build acceptance? When people act as if they believe, they may well come to believe…

Under this assumption, people buying high mileage (or hybrid) cars may well use established behavioral mechanisms to believe more in climate change than those buying an SUV. Those putting solar panels on their rooftops to lower their electricity bill might also be more amenable to convert their beliefs as well as their energy source. Something to think about.

We also might consider that when hope conquers fear it not only helps us as a person, it helps us as a species.