The Social Contingency of Wants Implications for Growth and the Environment
AbstractEconomic 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 InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 227.
Date of creation: Sep 1998
Date of revision:
Functionings; socially contingent wants; positional goods; greenhouse problem;
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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