Can rising incomes support sustainable well-being? No evidence for a “double dividend” in the United Kingdom

Summary

The double dividend hypothesis suggests that acting in more pro-environmental ways will not only benefit the environment but also carries a subjective well-being premium for those who do so, hence paying off doubly. We test the well-being payoff part of this hypothesis using a two-way fixed effects estimator with high-quality panel data for the United Kingdom during the period 2009 to 2019. Examining the link between pro-environmental behavior and subjective well-being (measured as life satisfaction), we find no evidence for even a small relationship between the two, despite a large sample size. In addition, we examine a precondition for the double dividend narrative, namely the relationship between rising incomes and pro-environmental behavior. Here we find that, in the United Kingdom, increasing incomes translate into slightly less pro-environmental behavior for the period in question. Both findings cast some doubt on the practicability of a double dividend narrative: improving material conditions may lead to a deterioration in pro-environmental behaviors, but even if one could transition to more pro-environmental behaviors, a double dividend may not materialize.