Environmental policy in a linear city model of product differentiation
AbstractThis paper analyzes how a tax/subsidy policy affects consumers' behavior when choosing between green (pollution-free goods) and conventional products, and its effects on welfare when a proportion of consumers have strong preferences for green goods. We analyze a Hotelling's linear city model where final products by two firms are symmetric in all dimensions except for the externality their production process generates. Our efficiency comparisons suggest that, under a setting of horizontal product differentiation, an environmental regulation (either on polluting firms or consumers buying their products) yields higher social welfare than the absence of policy. Moreover, the proportion of consumers who prefer green products affects the welfare gains from a subsidy or tax policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Cambridge University Press in its journal Environment and Development Economics.
Volume (Year): 17 (2012)
Issue (Month): 04 (August)
Contact details of provider:
Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Fax: +44 (0)1223 325150
Web page: http://journals.cambridge.org/jid_EDEProvider-Email:email@example.com
Other versions of this item:
- Ana Espinola-Arredondo & Huan Zhao, 2011. "Environmental Policy in a Linear City Model of Product Differentiation," Working Papers, School of Economic Sciences, Washington State University 2011-4, School of Economic Sciences, Washington State University.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L5 - Industrial Organization - - Regulation and Industrial Policy
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- JosÃ© Moraga-GonzÃ¡lez & Noemi PadrÃ³n-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
- G. F. Gori & L. Lambertini, 2012.
"Trade liberalisation between Asymmetric Countries with Environmentally Concerned Consumers,"
wp824, Dipartimento Scienze Economiche, Universita' di Bologna.
- Gori, Giuseppe Francesco & Lambertini, Luca, 2013. "Trade liberalisation between asymmetric countries with environmentally concerned consumers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 549-560.
- Giuseppe Francesco Gori & Luca Lambertini, 2012. "Trade Liberalisation between Asymmetric Countries with Environmentally Concerned Consumers," Working Paper Series, The Rimini Centre for Economic Analysis 40_12, The Rimini Centre for Economic Analysis.
- Ana Espinola-Arredondo & Felix Munoz-Garcia, 2012. "An Excessive Development of Green Products," Working Papers, School of Economic Sciences, Washington State University 2012-5, School of Economic Sciences, Washington State University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.