Sustainability and the Problem of Consumption
AbstractStrong 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 InfoPaper provided by Max Planck Institute of Economics, Evolutionary Economics Group in its series Papers on Economics and Evolution with number 2011-16.
Length: 23 pages
Date of creation: 06 Dec 2011
Date of revision:
Find related papers by JEL classification:
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
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