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Can the environment be an inferior good? A theory with context-dependent substitutability and needs

Report
Authors Marion Dupoux
Vincent Martinet
Publisher University of Gothenburg
Place of publication Gothenburg
Publication year 2019
Published at Department of Economics
Language en
Links hdl.handle.net/2077/60061
Keywords substitutability, environmental public goods, context, willingness to pay, inferior goods, needs
Subject categories Economics

Abstract

Theoretical models often assume the environment to be a normal good, irrespective of one’s income. However, a priori, nothing prohibits an environmental good from being normal for some individuals and inferior for others. We develop a conceptual framework in which private consumption and an environmental public good act as substitutes or complements for satisfying different needs. Subsequently, the environment can switch between normal and inferior depending on one’s income and environment. If the environment is inferior for some range of income, then the willingness to pay for environmental preservation becomes non-monotonic, thereby having implications for benefit transfers.

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Denna text är utskriven från följande webbsida:
http://www.gu.se/english/research/publication/?publicationId=279660
Utskriftsdatum: 2019-06-27