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Testing crucial model assumptions: the income/willingness to pay for the environment nexus in the Environmental Kutznetz Curve

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Author Info
AUCI SABRINA
BECCHETTI LEONARDO
RANDO LUCA

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Abstract

Several theoretical models investigating the relationship between economic growth and environmental degradation postulate that consumers’ willingness to pay for it gets higher as far as per capita income grows. We test this hypothesis on willingness to pay (WTP) for the environment data collected from the World Value Survey database for a large number of countries and find strong support for it after controlling for demographics, personal values and country variables such as domestic institutional quality and pollution intensity. We also document that the additional and most robust determinants of the WTP are age, education, religious practice, proxies of civic values (tax morale, sense of belonging to a wider community) and quality of domestic institutions.

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Paper provided by Tor Vergata University, CEIS in its series Departmental Working Papers with number 239.

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Date of creation: Sep 2006
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Handle: RePEc:rtv:ceiswp:239

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  5. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2002. "People's Opium? Religion and Economic Attitudes," CEPR Discussion Papers 3588, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Shafik, Nemat & Bandyopadhyay, Sushenjit, 1992. "Economic growth and environmental quality : time series and cross-country evidence," Policy Research Working Paper Series 904, The World Bank. [Downloadable!]
  7. Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January. [Downloadable!] (restricted)
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  17. Debra Israel & Arik Levinson, . "Willingness to Pay for Environmental Quality: Testable Empirical Implications of the Growth and Environment Literature," Working Papers gueconwpa~02-02-09, Georgetown University, Department of Economics. [Downloadable!]
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  18. Panayotou, Theodore, 1997. "Demystifying the environmental Kuznets curve: turning a black box into a policy tool," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 465-484, November. [Downloadable!]
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