Warm Glow, Good Feelings, and Contingent Valuation

By: Bishop, Richard C.


Bishop, Richard C., Warm Glow, Good Feelings, and Contingent Valuation, Journal of Agricultural and Resource Economics, Volume 43, Issue 3, September 2018, Pages 307-320

In the contingent valuation (CV) literature, confusion exists about warm glow and embedding effects. I show that i) some writers follow Andreoni’s (1989) definition of warm glow, but others think that subjects answering CV questions load up, free of charge, on “good feelings” from supporting the environment; ii) Andreoni’s warm glow would lead to embedding effects only in extreme circumstances; iii) Andreoni’s warm glow should be counted in valuation studies; and iv) there is scant evidence for good feelings being the source of embedding effects. In fact, embedding effects may not be limited to CV studies.