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We study how moral suasion that appeals to two major ethical theories, Consequentialism and Deontology, affects individual intentions to contribute to a public good. We use the COVID-19 pandemic as an exemplary case where there is a large gap between private and social costs and where moral suasion has been widely used as a policy instrument. Based on a survey experiment with a representative sample of around 3500 Germans at the beginning of the pandemic, we study how moral appeals affect contributions with low and high opportunity costs, hand washing and social distancing, to reduce the infection externality as well as the support for governmental regulation. We find that Deontological moral suasion, appealing to individual moral duty, is effective in increasing planned social distancing and hand-washing, while a Consequentialist appeal only increases planned hand-washing. Both appeals increase support for governmental regulation. Exploring heterogeneous treatment effects reveals that younger respondents are more susceptible to Deontological appeals. Our results highlight the potential of moral appeals to induce intended private contributions to a public good or the reduction of externalities, which can help to overcome collective action problems for a range of environmental issues.

This study builds on the fundamentals of the new economic geography and the skill-biased technological change argument, to empirically investigate whether increasing income/earning inequality enhances total factor productivity in South Africa. In so doing, panel data of district-municipalities and spatial econometric techniques are used for the period between 1995 and 2015, to gain a better understanding of the role of location and distance in the effects of income inequality on total factor productivity. The results from the analysis and empirical estimations indicate that: (1) there is strong support for the existence of positive spatial interactions in the effects of income inequality on total factor productivity; (2) the estimated direct effect of income inequality on TFP in local district-municipalities is negative and statistically significant, while the indirect effect is positive and statistically significant as well. These findings suggest that district-municipalities with moderate levels of inequality and high economic opportunities, attract more businesses, investments and important stocks of skilled labour from district-municipalities with high inequality. Furthermore, the finding of negative effects supports previous research suggesting that high levels of inequality set the stage for the adoption of distortionary policies which adversely influence the investment climate and produce political instability, thereby stifling the level of productivity and growth.