Voting for environmental policy under income and preference heterogeneity
AbstractWe examine the design of policies for promoting the consumption of green products under preference and income heterogeneity using organic food products as an example. Two instruments are considered: a price subsidy for the organic food 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 MTT Agrifood Research Finland in its series Discussion Papers with number 11863.
Date of creation: 2005
Date of revision:
Environmental Economics and Policy;
Other versions of this item:
- Essi Eerola & Anni Huhtala, 2008. "Voting for Environmental Policy Under Income and Preference Heterogeneity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 256-266.
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