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The Social Contingency of Wants Implications for Growth and the Environment

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  • Kjell Arne Brekke
  • Richard B. Howarth

    ()
    (Statistics Norway)

Abstract

Economic models typically assume that individual wants are determined by forces exogenous to the economic system. Social psychology and consumer research, in contrast, support the view that the perceived benefits of consumption are strongly affected by endogenously determined social norms. This paper presents a selective overview of the literature on the relationship between consumption and well-being, exploring the ways in which informal arguments from the descriptive social sciences might be linked to formal models of economic behavior. We incorporate Sen’s (1985) distinction between commodities and functionings into Nordhaus’ (1994) model of climate change and the world economy, showing that optimal paths for greenhouse gas emissions and capital accumulation are highly sensitive to the role of consumption norms in the welfare determination.

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Bibliographic Info

Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 227.

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Date of creation: Sep 1998
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Handle: RePEc:ssb:dispap:227

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Keywords: Functionings; socially contingent wants; positional goods; greenhouse problem;

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References

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  1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  2. Kjell Arne Brekke & Richard B. Howarth & Karine Nyborg, 1998. "Are there Social Limits to Growth?," Discussion Papers 239, Research Department of Statistics Norway.
  3. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-69, July.
  4. Smith, Adam, 1977. "An Inquiry into the Nature and Causes of the Wealth of Nations," University of Chicago Press Economics Books, University of Chicago Press, number 9780226763743 edited by Cannan, Edwin, October.
  5. Ng, Yew-Kwang & Wang, Jianguo, 1993. "Relative income, aspiration, environmental quality, individual and political myopia : Why may the rat-race for material growth be welfare-reducing?," Mathematical Social Sciences, Elsevier, vol. 26(1), pages 3-23, July.
  6. Howarth, Richard B., 1996. "Status effects and environmental externalities," Ecological Economics, Elsevier, vol. 16(1), pages 25-34, January.
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Cited by:
  1. Johansson-Stenman, Olof, 2001. "Estimating individual driving distance by car and public transport use in Sweden," Working Papers in Economics 36, University of Gothenburg, Department of Economics.
  2. Richard B. Howarth & Kjell Arne Brekke, 1998. "Status Preferences and Economic Growth," Discussion Papers 240, Research Department of Statistics Norway.
  3. Kverndokk, Snorre, 2009. "Why do people demand health?," HERO On line Working Paper Series 2000:5, Oslo University, Health Economics Research Programme.

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