Social Tipping Points in the Transition to a Sustainable Society: using Discrete Choice to Predict the Progression of Pro-Environmental Lifestyles

Climate change is "one of the greatest challenges of our time." The need for concerted effort to tackle this has been internationally recognised but remains unachieved. In spite of evidence of acceptance of both anthropogenic global warming and also the need for individuals to change their consumption patterns the pressure on governments to act has so far been insufficiently strong to overcome the economic desire to increase growth.

Individuals' attitudes to sustainability are therefore very important, both for the effect they have on influencing firms' plans for green products, and also to drive governments towards policies which will accelerate the transition. There is also a third effect - that of creating a social norm. It has been shown that individuals are strongly influenced by their perception of social descriptive. Much depends then on these attitudes.

This project proposes a bottom-up approach to environmental sustainability by integrating psychology theories into behavioural economics models of consumption choice. By examining how green attitudes influence individuals' decision making, I hope to be able to characterise outcomes based on factors such as the strength of social interactions.

We know anecdotally that debate on climate change and green lifestyles tends to be dominated by extreme views. This project will allow us to make predictions about the emergence and convergence of green attitudes across society, leading to interventions that can encourage greener consumption and thus directly tackle global warming.

This research will construct a discrete choice model of consumption decision in which individuals may decide between green and non-green lifestyles. The model will be adapted to include a variety of psychology-based motives, such as the "warm glow" introduced by Andreoni and the observance of social norms. The dynamics of the resulting model will be analysed using the technique for handling social interactions as laid out by Brock and Durlauf.

This model will then be tested experimentally. An important element of the model being examined is how social norms affect individuals' attitudes, so I am proposing to perform two phases of experimentation. The first, on students, will allow for basic verification and modification of the model. A subsequent phase will be necessary in order to achieve sufficient diversity of initial lifestyles.

The fraction of the population with green lifestyles is key. Increasing it has three effects. Firstly, it directly affects the formation of social descriptive norms. Cialdini summarises research showing that people are influenced towards an action in part based on their observation of that action by other people.

Secondly, it has an effect on government increasing pressure in the direction of policies which may accelerate the transition (for example by giving tax incentives to firms to encourage green innovation, or to raise taxes on carbon-intensive products).

Thirdly, it has an effect on firms. Microeconomic theory suggests that firms will adapt their product portfolios and marketing spend, to maximise their expected profits. However, if firms expect to see a significant reduction in profits then an equally rational response is to seek ways to delay any transition (for example using advertising to emphasise advantages of non-green products, or lobbying government to influence policy implementation). This research project will allow us to investigate the effect that a change in consumer lifestyles has on firms' responses. It is hoped that this will enable us to construct policies which maximise the chances of a successful sustainable transition and hence remove some of the obstacles on the path to addressing climate change.