Intertemporal preferences and resource extraction: Asymmetric effects of risk taking and patience on natural resource depletion

Understanding how behavioral preferences shape natural resource management decisions is crucial for sustainable development, yet their complex interplay remains understudied. This research examines the relationship between risk taking propensity and patience levels with natural resource depletion across 53 countries using Hausman-Taylor estimation and Mundlak approach. We demonstrate that risk taking significantly accelerates resource depletion while patience exerts restraining effects, with both relationships intensifying at higher depletion levels. A key finding reveals a U-shaped relationship where moderate patience promotes conservation but excessive patience exhibits diminishing marginal benefits. Panel quantile regression confirms these behavioral effects amplify at upper depletion quantiles, validating loss aversion and scarcity psychology theories in commons dilemmas. Critically, preference effects vary systematically across institutional contexts, strengthening in high social mobility and low altruism societies, differing substantially across income levels, and even reversing in state-controlled extraction regimes. Resource specific analyses show preferences primarily influence fossil fuel extraction rather than minerals or forests, highlighting sectoral heterogeneity in behavioral mechanisms. Our findings bridge behavioral economics with institutional perspectives on resource governance demonstrating that effective policy interventions targeting behavioral preferences must account for institutional context, with market-based mechanisms like progressive extraction taxes proving effective in market-oriented economies while state-controlled regimes require fundamental governance reforms.