Insights from behavioural economics to enhance the environmental dimension of sustainable development

Abstract

Individuals everywhere and every day take decisions and make choices that affect the environment either positively or negatively. By understanding and analysing the determinants and incentives of humans' decision-making process, behavioural economics helps change behaviours toward more sustainable practices using efficient and well- designed policies. Using a survey targeting 4000 households' participants from 11 Egyptian governorates in 2019, the paper explores attitudes' determinants and behaviour's motivations concerning environmental concerns, which- in turn- help policymakers to design effective policies considering households' attitudes. Using a structural equation model, the paper examines the critical links among attitudes, values, and behaviours related to sustainability. It provides empirical evidence from a data set collected from the surveyed sample. The paper also indicates how insights and tools from behavioural economics could help understand attitudes, values, and behaviours. The current study builds on contemporary literature and develops last research to explore how behaviour economics helps policymakers design cost-effective policies to change behaviours toward sustainable environmental practices. The results indicated that behavioural economics has a minimal role in designing sustainable development policies and environmental interventions in Egypt- as a developing country- and showed that there is an overall willingness to change the way of thinking toward more environmentally friendly choices, specifically if policy interventions derive the behaviours in that direction. Finally, many essential recommendations and policy implications were concluded to develop public policies according to environmental sustainability considerations.