Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods

Green goods such as recycled paper stationary or carbon-neutral flights provide increasingly popular examples of impure public goods. Motivated by theoretical treatments of green goods as a bundle of private and public characteristics in proportions fixed by the provider, we design an experiment with two linked treatments to test how the presence of impure public goods affects behaviour towards public good causes. We set parameters, such that from a standard economic perspective the presence of the impure public good is behaviourally irrelevant. In a treatment where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour is lower in the presence of the impure public good. On the contrary, in the treatment where the impure public good is more generous towards the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We observe that impure public goods, that are theoretically irrelevant and are mostly self-interested, may hinder pro-social behaviour and look for explanations in social psychology, such as the phenomenon of thoughtful anchoring, motivated reasoning and reluctant altruism. The results from this experiment question the role of green goods in enhancing environmentally friendly behaviours.