Pollution perception: A challenge for intergenerational equity
In this article we extend the recent literature on overlapping generations and pollution by allowing generations to perceive the level of pollution differently than the actual level of pollution. We call this pollution perception. Pollution perception can visualize itself as either a concern for the flow of pollution only, or for the stock, or a combination of both. We derive this extension based on empirical evidence from recent advances in behavioural economics. Pollution perception has not only significant consequences for the steady state levels of pollution and capital, but we also find a qualitative change in the dynamics from similar models without pollution perception [A. John, R. Pecchenino, An overlapping generations model of growth and the environment, Econ. J. 104 (1994) 1393-1410]. Specifically, we derive optimal non-linear dynamics through complex eigenvalues and Hopf or Flip bifurcations for a large set of parameters. This leads to violations of two standard criteria of sustainability, suggesting that pollution perception can be another source of intergenerational inequity.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- A. Abel, 2010.
"Asset prices under habit formation and catching up with the Jones,"
Levine's Working Paper Archive
1395, David K. Levine.
- Abel, Andrew B, 1990. "Asset Prices under Habit Formation and Catching Up with the Joneses," American Economic Review, American Economic Association, vol. 80(2), pages 38-42, May.
- Abel, A.B., 1990. "Asset Prices Under Habit Formation And Catching Up With The Joneses," Weiss Center Working Papers 1-90, Wharton School - Weiss Center for International Financial Research.
- Andrew B. Abel, 1990. "Asset Prices under Habit Formation and Catching up with the Joneses," NBER Working Papers 3279, National Bureau of Economic Research, Inc.
- Andrew B. Abel, . "Asset Prices Under Habit Formation and Catching Up With the Jones," Rodney L. White Center for Financial Research Working Papers 1-90, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel, . "Asset Prices Under Habit Formation and Catching Up With the Jones," Rodney L. White Center for Financial Research Working Papers 01-90, Wharton School Rodney L. White Center for Financial Research.
- N. Gregory Mankiw & David Romer & David N. Weil, 1990.
"A Contribution to the Empirics of Economic Growth,"
NBER Working Papers
3541, National Bureau of Economic Research, Inc.
- Meng, Qinglai, 2006. "Impatience and equilibrium indeterminacy," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2671-2692, December.
- Asheim, G.B. & Buchholz, W. & Tungodden, B., 1999.
5/99, Norwegian School of Economics and Business Administration-.
- Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244, December.
- Christopher D. Carroll & Jody Overland & David N. Weil, 1995.
"Saving and growth with habit formation,"
Finance and Economics Discussion Series
95-42, Board of Governors of the Federal Reserve System (U.S.).
- Christopher D. Carroll & Jody Overland & David N. Weil, 2000. "Mathematica code for 'Saving and Growth with Habit Formation' and 'Comparison Utility in a Growth Model'," QM&RBC Codes 43, Quantitative Macroeconomics & Real Business Cycles.
- Bisin, A. & Verdier, T., 1997.
"The Economics of Cultural Transmission and the Dynamics of Preferences,"
DELTA Working Papers
97-03, DELTA (Ecole normale supérieure).
- Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
- Robert J. Barro, 2012.
"Inflation and Economic Growth,"
CEMA Working Papers
568, China Economics and Management Academy, Central University of Finance and Economics.
- John C. V. Pezzey, 1997. "Sustainability Constraints versus "Optimality" versus Intertemporal Concern, and Axioms versus Data," Land Economics, University of Wisconsin Press, vol. 73(4), pages 448-466.
- Jouvet, Pierre-Andre & Michel, Philippe & Vidal, Jean-Pierre, 2000.
" Intergenerational Altruism and the Environment,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 102(1), pages 135-50, March.
- JOUVET, Pierre-André & MICHEL, Philippe & VIDAL, Jean-Pierre, 1997. "Intergenerational altruism and the environment," CORE Discussion Papers 1997041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jouvet, P.-A. & Michel, P. & Vidal, J.-P., 1999. "Intergenerational Altruism and the Environment," G.R.E.Q.A.M. 99a03, Universite Aix-Marseille III.
- John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
- Bruno S. Frey & Alois Stutzer, 2002.
"What Can Economists Learn from Happiness Research?,"
Journal of Economic Literature,
American Economic Association, vol. 40(2), pages 402-435, June.
- Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
- Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
- de la Croix, David, 1996.
"The Dynamics of Bequeathed Tastes,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
1996004, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Lind, Robert C, 1995. "Intergenerational equity, discounting, and the role of cost-benefit analysis in evaluating global climate policy," Energy Policy, Elsevier, vol. 23(4-5), pages 379-389.
- Seegmuller, Thomas & Verchere, Alban, 2004.
"Pollution as a source of endogenous fluctuations and periodic welfare inequality in OLG economies,"
Elsevier, vol. 84(3), pages 363-369, September.
- Thomas Seegmuller & Alban Verchere, 2002. "Pollution as a source of endogenous fluctuations and periodic welfare inequality in OLG economies," Working Papers of BETA 2002-18, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Thomas Seegmuller & Alban Verchère, 2004. "Pollution as a source of endogenous fluctuations and periodic welfare inequality in OLG economies," Post-Print halshs-00194147, HAL.
- R. M. Solow, 1974.
"Intergenerational Equity and Exhaustible Resources,"
Review of Economic Studies,
Oxford University Press, vol. 41(5), pages 29-45.
- R. M. Solow, 1973. "Intergenerational Equity and Exhaustable Resources," Working papers 103, Massachusetts Institute of Technology (MIT), Department of Economics.
- Scitovsky, Tibor, 1992. "The Joyless Economy: The Psychology of Human Satisfaction," OUP Catalogue, Oxford University Press, number 9780195073478, December.
- repec:ebl:ecbull:v:4:y:2002:i:7:p:1-10 is not listed on IDEAS
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Sen, Amartya, 1995. "Inequality Reexamined," OUP Catalogue, Oxford University Press, number 9780198289289, December.
- Richard B. Howarth, 1997. "Sustainability as Opportunity," Land Economics, University of Wisconsin Press, vol. 73(4), pages 569-579.
- Shi, Shouyong & Epstein, Larry G, 1993. "Habits and Time Preference," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 61-84, February.
- Junxi Zhang, 1999. "Environmental sustainability, nonlinear dynamics and chaos," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(2), pages 489-500.
- Tetsuo Ono, 2003. "Environmental Tax Policy and Long-Run Economic Growth," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 203-217.
- Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 729-758.
When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:55:y:2008:i:3:p:296-309. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.