Is Pro-Environmental Consumption Utility-Maximizing? Evidence from Subjective Well-Being Data
AbstractThis paper studies whether pro-environmental consumption choices are consistent with utility maximization and what role the consumption behavior of reference persons and one’s own past behavior play in this context. By combining data on individuals’ pro-environmental consumption from a unique data set with data on subjective well-being, we find that people could attain higher well-being (utility) by unilaterally consuming more environmentally friendly while at the same time reducing the quantity consumed. The distortions identified are smaller when people’s reference persons consume more environmentally friendly and when the individual has a longer environmental friendly consumption history. We therefore conclude that learning from the behavior of others and from one’s own past experience may help alleviate decision error in environment-friendly consumption.
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Bibliographic InfoPaper provided by University of Oldenburg, Department of Economics in its series Working Papers with number V-322-10.
Length: 36 pages
Date of creation: Apr 2010
Date of revision: Apr 2010
Publication status: Published in Oldenburg Working Papers V-322-10
pro-environmental; consumption; consumer choice; utility maximization; wellbeing life satisfaction;
Find related papers by JEL classification:
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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