Do wealth levels affect the contribution to negative externalities?

This paper experimentally explores the link between poverty and decisions that lead environmental degradation. In the experiment, individuals with different wealth levels play a game that describes environmental degradation as a contribution to an activity that generates a negative externality. The experimental data show that wealth levels not related to the environment (exogenous poverty) play no significant role in environmental decisions. However, the variation in wealth as a consequence of the contribution to environmental degradation (endogenous poverty) affects the behavior of individuals, that enter a spiral of poverty and environmental degradation. These results suggest the existence of a poverty-environment trap.Authors acknowledge the support of the Research Project ECO2015-65031-R and RED2018-102353-T (J.M. Benito-Ostolaza and N.Osés-Eraso), ECO2015-64330 (R. Ezcurra) (Spanish Ministry of Economy, Industry and Competitiveness) and PGC2018-093542-B-100 (R. Ezcurra)