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The Social Contingency of Wants Implications for Growth and the Environment

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Author Info
Kjell Arne Brekke and Richard B. Howarth () (Statistics Norway)

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

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Find related papers by JEL classification:
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
D60 - Microeconomics - - Welfare Economics - - - General
Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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  1. Oswald, A.J., 1997. "Happiness and Economic Performance," Papers 18, Centre for Economic Performance & Institute of Economics.
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  2. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-69, July. [Downloadable!] (restricted)
  3. Kjell Arne Brekke, Richard B. Howarth and Karine Nyborg, 1998. "Are there Social Limits to Growth?," Discussion Papers 239, Research Department of Statistics Norway. [Downloadable!]
  4. 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. [Downloadable!] (restricted)
  5. Howarth, Richard B., 1996. "Status effects and environmental externalities," Ecological Economics, Elsevier, vol. 16(1), pages 25-34, January. [Downloadable!] (restricted)
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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. Johansson-Stenman, Olof, 2001. "Estimating individual driving distance by car and public transport use in Sweden," Working Papers in Economics 36, Göteborg University, Department of Economics. [Downloadable!]
    Other versions:
  2. Richard B. Howarth and Kjell Arne Brekke, 1998. "Status Preferences and Economic Growth," Discussion Papers 240, Research Department of Statistics Norway. [Downloadable!]
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