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The Social Contingency of Wants Implications for Growth and the Environment

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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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  • Kjell Arne Brekke & Richard B. Howarth, 1998. "The Social Contingency of Wants Implications for Growth and the Environment," Discussion Papers 227, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:227
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    References listed on IDEAS

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    1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    2. 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, November.
    3. William Ellery Channing, 1994. "Change," American Journal of Economics and Sociology, Wiley Blackwell, vol. 53(1), pages 15-15, January.
    4. Kjell Arne Brekke & Richard B. Howarth & Karine Nyborg, 1998. "Are there Social Limits to Growth?," Discussion Papers 239, Statistics Norway, Research Department.
    5. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-169, July.
    6. 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.
    7. Howarth, Richard B., 1996. "Status effects and environmental externalities," Ecological Economics, Elsevier, vol. 16(1), pages 25-34, January.
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    Citations

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    Cited by:

    1. Olof Johansson-Stenman, 2002. "Estimating individual driving distance by car and public transport use in Sweden," Applied Economics, Taylor & Francis Journals, vol. 34(8), pages 959-967.
    2. Nhim, Tum & Richter, Andries, 2022. "Path dependencies and institutional traps in water governance – Evidence from Cambodia," Ecological Economics, Elsevier, vol. 196(C).
    3. Richard B. Howarth & Kjell Arne Brekke, 1998. "Status Preferences and Economic Growth," Discussion Papers 240, Statistics Norway, Research Department.
    4. Kverndokk, Snorre, 2009. "Why do people demand health?," HERO Online Working Paper Series 2000:5, University of Oslo, Health Economics Research Programme.

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    More about this item

    Keywords

    Functionings; socially contingent wants; positional goods; greenhouse problem;
    All these keywords.

    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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