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How do people discount over spatial distance?

  • Lisa Bruttel and Niklas Ziemann ORCID logo EMAIL logo
Published/Copyright: December 10, 2022

Abstract

This paper studies how individuals discount the utility they derive from their provision of goods over spatial distance. In a controlled laboratory experiment in Germany, we elicit preferences for the provision of the same good at different locations. To isolate spatial preferences from any other direct value of the goods being close to the individual, we focus on goods with “existence value.” We find that individuals put special weight on the provision of these goods in their immediate vicinity. This “vicinity bias” represents a spatial analogy to the “present bias” in the time dimension.

JEL Classification: C91; D90; H41; R12

Article note

Data are available in the project “How do people discount over spatial distance?” on OSF: https://osf.io/cjvbn/?view_only=4a8c283de71d4d8dbc81369cfe169f98.


Funding statement: This research did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sectors.

Acknowledgment

The paper benefited from helpful comments by Matthias Kalkuhl, Jörg Oechssler, Sylvi Rzepka, as well as the VfS Annual Conferences 2020 and seminars in Potsdam and Cottbus. We are grateful to Robin Bitter, Luis Koch, Claudia Möllers, Juri Nithammer, Birte Röttges, and Tobias Werner for their help in conducting the experiments.

  1. Conflict of interest: None.

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Published Online: 2022-12-10
Published in Print: 2023-02-28

© 2022 Walter de Gruyter GmbH, Berlin/Boston

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