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Population size and environmental quality

Author

Listed:
  • Till Requate

    (Interdisciplinary Institute of Environmental Economics, University of Heidelberg, D-69117 Heidelberg, Germany)

  • Mark B. Cronshaw

    (Environment and Behavior Program - Institute of Behavioral Science and The Economics Institute, 1030 13th Street, Boulder, CO 80302, USA)

Abstract

This paper presents a simple general equilibrium analysis of first best allocations in an economy where a consumption good is produced using labor. Production results in pollution, which is a public bad. Pollution abatement can be achieved either by restricting production or by using additional labor. We consider how the first best allocation and Pigouvian tax vary with population size. Consumers are unambiguously worse off when the population is larger, but not necessarily due to increased pollution. In fact, optimal policy on how pollution and labor should vary with population size is very sensitive to preferences and technology. The best response to an increase in population size might be either to increase or to decrease emissions and/or labor, depending on functional forms and parameters. However, given separable preferences and some convexity, the optimal emissions tax increases, and the first best level of per-capita consumption decreases with population size. The paper also considers the extent to which exogenous technical progress can overturn these conclusions.

Suggested Citation

  • Till Requate & Mark B. Cronshaw, 1997. "Population size and environmental quality," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(3), pages 299-316.
    • Handle: RePEc:spr:jopoec:v:10:y:1997:i:3:p:299-316
    Note: Received August 28, 1996 / Accepted January 27, 1997
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    Citations

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    Cited by:

    1. Frederic Tournemaine & Christopher Tsoukis, 2018. "The Great Transition: Implications From Environmental Policy For The Quality–Quantity Trade-Off In Children-Rearing," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1155-1174, December.
    2. Ronald R. Kumar & Peter J. Stauvermann, 2019. "The Effects of a Revenue-Neutral Child Subsidy Tax Mechanism on Growth and GHG Emissions," Sustainability, MDPI, vol. 11(9), pages 1-23, May.
    3. Simone Marsiglio, 2017. "A simple endogenous growth model with endogenous fertility and environmental concern," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(3), pages 263-282, July.
    4. repec:awi:wpaper:0427 is not listed on IDEAS
    5. Andreas Schaefer, 2016. "Survival to Adulthood and the Growth Drag of Pollution," CER-ETH Economics working paper series 16/241, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    6. Phu NGUYEN VAN, 2002. "Endogenous Population and Environmental Quality," Working Papers of BETA 2002-09, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

    More about this item

    Keywords

    First best allocation · emission tax · Pigouvian tax · population size;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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