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Risk Perceptions, Voluntary Contributions and Environmental Policy

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Author Info

  • Johanna Etner

    (GAINS et EUREQua)

  • Meglena Jeleva

    () (LEN-C3E et EUREQua)

  • Pierre-André Jouvet

    (GAINS et GREQAM)

Abstract

This article study the impact of risk perception on environmental policy. The environmental quality is uncertain and can be improved by voluntary contributions. We introduce then an heterogeneity in individuals' risk perceptions. In this context, the social optimum can be decentralized by tax financed government subsidies to private provision. We distinguish the case of a government who represents perfectly agents' preferences from the case of a government with its own risk preferences. In the two cases, we show that neutrality still holds.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/V04097.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v04097.

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Length: 20 pages
Date of creation: Oct 2004
Date of revision:
Handle: RePEc:mse:wpsorb:v04097

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Keywords: Risk perception; pessimism; optimism; environmental quality.;

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References

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  1. B. Douglas Bernheim & Kyle Bagwell, 1989. "Is Everything Neutral?," NBER Working Papers 2086, National Bureau of Economic Research, Inc.
  2. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
  3. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
  4. Kimball, Miles S. & Mankiw, N. Gregory, 1989. "Precautionary Saving and the Timing of Taxes," Scholarly Articles 3443105, Harvard University Department of Economics.
  5. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  6. Martin Feldstein, 1988. "The Effects of Fiscal Policies When Incomes are Uncertain: A Contradiction to Ricardian Equivalence," NBER Working Papers 2062, National Bureau of Economic Research, Inc.
  7. Jouvet, P-A. & Michel, P. & Pestieau, P., 1996. "Altruism, Voluntary Contributions and Neutrality. The Case of Environmental Quality," G.R.E.Q.A.M. 96a32, Universite Aix-Marseille III.
  8. Robin Boadway & Pierre Pestieau & David Wildasin, 1987. "Tax-Transfer Policies and the Voluntary Provision of Public Goods," Working Papers 682, Queen's University, Department of Economics.
  9. Herman Cousy, 1996. "The Precautionary Principle: A Status Questionis*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 21(2), pages 158-169, April.
  10. Johanna Etner & Meglena Jeleva & Pierre-Andre Jouvet, 2009. "Pessimism Or Optimism: A Justification To Voluntary Contributions Toward Environmental Quality ," Australian Economic Papers, Wiley Blackwell, vol. 48(4), pages 308-319, December.
  11. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
  12. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  13. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
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Cited by:
  1. Langlais, Eric, 2010. "Safety and the Allocation of Costs in Large Accidents," MPRA Paper 25710, University Library of Munich, Germany.

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