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Environmental Degradation and the Limits to LOV

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  • Yu-Fu Chen
  • Hassan Molana
  • Catia Montagna

Abstract

We show how consumers’ environmental concerns may limit ‘love of variety’ (LOV) and be reflected in consumers decisions. We investigate how the impact of environmental degradation on LOV influences demand and optimal product variety, and how a pollution tax on firms might be used to improve upon the market outcome and increase welfare.

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File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_234.pdf
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Bibliographic Info

Paper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 234.

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Length: 5 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:dun:dpaper:234

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Keywords: Environmental degradation; love-of-variety; environmental policy;

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  1. Hassan Molana & Catia Montagna, 1998. "Market Structure, Cost Asymmetries and Fiscal Policy Effectiveness," Dundee Discussion Papers in Economics 089, Economic Studies, University of Dundee.
  2. Sajal Lahiri & Yoshiyasu Ono, 2007. "Relative Emission Standard versus Tax under Oligopoly: The Role of Free Entry," Journal of Economics, Springer, vol. 91(2), pages 107-128, June.
  3. Copeland,B.R. & Scott Taylor,M., 2003. "Trade, growth and the environment," Working papers 10, Wisconsin Madison - Social Systems.
  4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  5. Catia Montagna, 1998. "Efficiency Gaps, Love of Variety and International Trade," Dundee Discussion Papers in Economics 090, Economic Studies, University of Dundee.
  6. Benassy, Jean-Pascal, 1991. "Monopolistic competition," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 37, pages 1997-2045 Elsevier.
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