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Voting for Environmental Policy Under Income and Preference Heterogeneity

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  • Essi Eerola
  • Anni Huhtala

Abstract

We examine the design of policies for promoting the consumption of green products under preference and income heterogeneity using organic food as an example. Two instruments are considered: a price subsidy for organic food products and a tax on conventional products. When the income differences and social benefits of organic farming are large, these factors dominate in shaping the policy preferences of the majority. In this case, the environmental policies preferred by the majority tend to be stricter than socially optimal policies. However, when income differences are small, policy preferences are more directly determined by tastes for organic products and the majority may prefer no intervention. Copyright 2008, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01042.x
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 90 (2008)
Issue (Month): 1 ()
Pages: 256-266

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Handle: RePEc:oup:ajagec:v:90:y:2008:i:1:p:256-266

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Cited by:
  1. Haavio, Markus & Kotakorpi, Kaisa, 2011. "The political economy of sin taxes," European Economic Review, Elsevier, vol. 55(4), pages 575-594, May.

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