Promoting Demand for Organic Food Under Preference and Income Heterogeneity
AbstractWe examine the design of policies for promoting the consumption of green products under preference and income heterogeneity using organic products as an example. Two instruments are considered: a price subsidy for the organic products and a tax on the conventional products. Under income disparity, consumers with high income always prefer a socially optimal subsidy to a socially optimal tax, while low-income consumers prefer a tax on conventional products. When environmental policy is determined by the median voter, the policies implemented tend to be stricter than socially optimal policies if income differences are large.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24664.
Date of creation: 2005
Date of revision:
taxation; preference heterogeneity; income disparity; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety;
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