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On Income Inequality and Green Preferences

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Author Info
Laura Marsiliani (W. Allen Wallis Institute of Political Economy, University of Rochester)
Thomas Renstrom (W. Allen Wallis Institute of Political Economy, University of Rochester and CEPR)
Abstract

We derive conditions on individual preferences and technology that give rise to a negative correlation between income inequality and environmental protection. We present a class of models (which captures a static model as well as an overlapping-generations model) in which individuals differ in earning abilities, and where a majority elected representative takes decisions over a pollution tax and a redistributive tax. We show that, if private consumption goods and the environment are non-inferior goods, then if the decisive individual has lower ability than the average, she will prefer a higher redistributive tax and a lower pollution tax.

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File URL: http://www.wallis.rochester.edu/WallisPapers/wallis_30.pdf
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Publisher Info
Paper provided by University of Rochester - Wallis Institute of Political Economy in its series Wallis Working Papers with number WP30.

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Date of creation: Oct 2002
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Handle: RePEc:roc:wallis:wp30

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Postal: UNIVERSITY OF ROCHESTER, Wallis Institute, HARKNESS 109B ROCHESTER NEW YORK 14627 U.S.A.

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Related research
Keywords: Environmental policy; redistribution; inequality; political economy;

Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Osborne, Martin J & Slivinski, Al, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 65-96, February. [Downloadable!] (restricted)
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  2. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October. [Downloadable!] (restricted)
  3. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April. [Downloadable!] (restricted)
  4. Marsiliani, L. & Renstroem, T.I., 2000. "Inequality, environmental protection and growth," Discussion Paper 34, Tilburg University, Center for Economic Research. [Downloadable!]
  5. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June. [Downloadable!] (restricted)
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  6. Kahn, Matthew E & Matsusaka, John G, 1997. "Demand for Environmental Goods: Evidence from Voting Patterns on California Initiatives," Journal of Law & Economics, University of Chicago Press, vol. 40(1), pages 137-73, April.
    Other versions:
  7. Marsiliani, Laura & Renstrom, Thomas I, 2000. "Time Inconsistency in Environmental Policy: Tax Earmarking as a Commitment Solution," Economic Journal, Royal Economic Society, vol. 110(462), pages C123-38, March. [Downloadable!] (restricted)
  8. Besley, Timothy & Coate, Stephen, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 85-114, February.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aleix Calveras & Juan José Ganuza & Gerard Llobet, 2005. "Regulation and Opportunism: How Much Activism Do We Need?," Economics Working Papers 935, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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