Though people like to think of themselves as rational consumers, modern psychology has revealed quite the opposite. The field of neuroeconomics, studying the brain’s role in buying and selling decisions, has produced several studies underlining the brain’s reliance on emotion over intellect, according to a study by University College London. An example of this is a consumer’s willingness to pay (WTP) more for an emotional value of green products. In recent years, green companies have benefited from consumers’ desire to feel good about their consumption’s impact on the environment, according to Freakonomics.com.
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In a draft paper put out by brother-sister economist team Steve and Alison Sexton, they delve into how much emotion plays a role in environmentally conscious consumption. Entitled Conspicuous Conservation: The Prius Effect and WTP for Environmental Bona Fides, the Sextons show that while hybrid vehicle purchases are relatively equal across America, communities with a greener culture tend to have more Prius (a vehicle that aesthetically distinguishes itself as “green”) owners. The Sexton’s goal wasn’t to chastise conspicuous conservation, but rather underline the effect emotion can have in consumer purchases. Consumers have a positive emotional connection with products that reduce their harm on the earth.
Reason vs. Emotion
As John Haidt notes in his New York Times opinion piece entitled “Reasons Matter (When Intuitions Don’t Object),” mounting data from modern psychology shows that a person’s emotional state or feeling toward an issue can in large part determine their opinion, right or wrong.