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Sustainability and the Problem of Consumption

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  • Ulrich Witt

Abstract

Strong growth in disposable income has inflated consumption to unprecedented, but not sustainable levels. In this process consumer behavior has been changing. To explain the driving forces of this development, the paper introduces a theory of evolving consumer preferences that is molded in an evolutionary paradigm. The theory allows to better assess how individual welfare would be directly affected by policy measures designed to make consumption sustainable. Such policy measures are likely to also trigger indirect welfare losses by negative employment effects. The policy debate therefore needs to pay attention to both direct and indirect welfare effects. As a concrete proposal a redesign of consumption taxes is discussed that accounts for both concerns.

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Bibliographic Info

Paper provided by Max Planck Institute of Economics, Evolutionary Economics Group in its series Papers on Economics and Evolution with number 2011-16.

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Length: 23 pages
Date of creation: 06 Dec 2011
Date of revision:
Handle: RePEc:esi:evopap:2011-16

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Keywords: consumption; preferences; growth; sustainability; satiation; welfare; consumption tax;

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References

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  1. Norton, Bryan & Costanza, Robert & Bishop, Richard C., 1998. "The evolution of preferences: Why 'sovereign' preferences may not lead to sustainable policies and what to do about it," Ecological Economics, Elsevier, vol. 24(2-3), pages 193-211, February.
  2. Gowdy, John, 2005. "Toward a new welfare economics for sustainability," Ecological Economics, Elsevier, vol. 53(2), pages 211-222, April.
  3. Corinna Manig & Alessio Moneta, 2009. "More Or Better? Measuring Quality Versus Quantity In Food Consumption," Papers on Economics and Evolution 2009-13, Max Planck Institute of Economics, Evolutionary Economics Group.
  4. Binswanger, Mathias, 2006. "Why does income growth fail to make us happier?: Searching for the treadmills behind the paradox of happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 366-381, April.
  5. Jackson, Tim & Marks, Nic, 1999. "Consumption, sustainable welfare and human needs--with reference to UK expenditure patterns between 1954 and 1994," Ecological Economics, Elsevier, vol. 28(3), pages 421-441, March.
  6. Andreas Chai & Alessio Moneta, 2010. "Retrospectives: Engel Curves," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 225-40, Winter.
  7. Ropke, Inge, 1999. "The dynamics of willingness to consume," Ecological Economics, Elsevier, vol. 28(3), pages 399-420, March.
  8. Sorrell, Steve, 2009. "Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency," Energy Policy, Elsevier, vol. 37(4), pages 1456-1469, April.
  9. Meyer, Bernd & Distelkamp, Martin & Wolter, Marc Ingo, 2007. "Material efficiency and economic-environmental sustainability. Results of simulations for Germany with the model PANTA RHEI," Ecological Economics, Elsevier, vol. 63(1), pages 192-200, June.
  10. Ulrich Witt & Christian Schubert, 2010. "Extending the Informational Basis of Welfare Economics: The Case of Preference Dynamics," Papers on Economics and Evolution 2010-05, Max Planck Institute of Economics, Evolutionary Economics Group.
  11. Russell, Clifford S., 2001. "Applying Economics to the Environment," OUP Catalogue, Oxford University Press, number 9780195126846.
  12. Ulrich Witt, 2006. "Evolutionary Economics," Papers on Economics and Evolution 2006-05, Max Planck Institute of Economics, Evolutionary Economics Group.
  13. Richard J. Herrnstein & Drazen Prelec, 1991. "Melioration: A Theory of Distributed Choice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 137-156, Summer.
  14. Baumgärtner, Stefan & Quaas, Martin, 2010. "What is sustainability economics?," Ecological Economics, Elsevier, vol. 69(3), pages 445-450, January.
  15. Røpke, Inge, 2009. "Theories of practice -- New inspiration for ecological economic studies on consumption," Ecological Economics, Elsevier, vol. 68(10), pages 2490-2497, August.
  16. Alcott, Blake, 2008. "The sufficiency strategy: Would rich-world frugality lower environmental impact," Ecological Economics, Elsevier, vol. 64(4), pages 770-786, February.
  17. Martínez-Alier, Joan & Pascual, Unai & Vivien, Franck-Dominique & Zaccai, Edwin, 2010. "Sustainable de-growth: Mapping the context, criticisms and future prospects of an emergent paradigm," Ecological Economics, Elsevier, vol. 69(9), pages 1741-1747, July.
  18. Ayres, Robert U., 2008. "Sustainability economics: Where do we stand?," Ecological Economics, Elsevier, vol. 67(2), pages 281-310, September.
  19. Schor, Juliet B., 2005. "Prices and quantities: Unsustainable consumption and the global economy," Ecological Economics, Elsevier, vol. 55(3), pages 309-320, November.
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Cited by:
  1. Leonhard Lades, 2013. "Explaining shapes of Engel curves: the impact of differential satiation dynamics on consumer behavior," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1023-1045, November.

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