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Environmental Goods and the Distribution of Income

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  • Udo Ebert

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Abstract

The paper presents a (theoretical) investigation of the distributional impacts of environmental commodities. It introduces an appropriate framework, defines concepts for measuring benefits and examines the determinants of benefit incidence within this setup. Its emphasis is on methodology and on recognizing the relevant economic variables and information. It turns out that in an “equal-preference” model the magnitude of the income elasticity of marginal willingness to pay for an environmental good is the crucial variable determining progressivity. It is related to a number of other elasticities which are more easily accessible to an empirical estimation. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Udo Ebert, 2003. "Environmental Goods and the Distribution of Income," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(4), pages 435-459, August.
  • Handle: RePEc:kap:enreec:v:25:y:2003:i:4:p:435-459 DOI: 10.1023/A:1025052225929
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    References listed on IDEAS

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    1. W. E. Diewert, 1974. "A Note on Aggregation and Elasticities of Substitution," Canadian Journal of Economics, Canadian Economics Association, vol. 7(1), pages 12-20, February.
    2. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
    3. Carson, Richard & Flores, Nicholas E. & Hanemann, W. Michael, 1998. "Sequencing and Valuing Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 314-323, November.
    4. Udo Ebert, 1998. "Evaluation of Nonmarket Goods: Recovering Unconditional Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 241-254.
    5. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    6. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    7. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, November.
    8. Snow, Arthur & Warren, Ronald Jr., 1983. "Tax progression in Lindahl equilibrium," Economics Letters, Elsevier, vol. 12(3-4), pages 319-326.
    9. Ebert, Udo & Lambert, Peter J, 1999. "Combined Income Taxes and Tax-Benefit Systems," The Economic Record, The Economic Society of Australia, vol. 75(231), pages 397-404, December.
    10. Bengt Kristrom & Pere Riera, 1996. "Is the income elasticity of environmental improvements less than one?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 45-55.
    11. Flores, Nicholas E. & Carson, Richard T., 1997. "The Relationship between the Income Elasticities of Demand and Willingness to Pay," Journal of Environmental Economics and Management, Elsevier, pages 287-295.
    12. Maital, Shlomo, 1973. "Public Goods and Income Distribution: Some Further Results," Econometrica, Econometric Society, vol. 41(3), pages 561-568, May.
    13. Kovenock, Daniel & Sadka, Efraim, 1981. "Progression under the benefit approach to the theory of taxation," Economics Letters, Elsevier, vol. 8(1), pages 95-99.
    14. Stina Hökby & Tore Söderqvist, 2003. "Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 361-383.
    15. Freeman III, A. Myrick, 1985. "Methods for assessing the benefits of environmental programs," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 6, pages 223-270 Elsevier.
    16. Ebert, Udo, 1997. "Selecting Preferences for Nonmarket Goods: Possibilities and Limitations," Public Finance = Finances publiques, , vol. 52(3-4), pages 301-317.
    17. Brennan, Geoffrey, 1976. "The Distributional Implications of Public Goods," Econometrica, Econometric Society, vol. 44(2), pages 391-399, March.
    18. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-647, June.
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    Citations

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    Cited by:

    1. Wolfgang Buchholz & Wolfgang Peters, 2008. "Equal sacrifice and fair burden-sharing in a public goods economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 415-429, August.
    2. Parry, Ian & Walls, Margaret & Sigman, Hilary & Williams III, Roberton, 2005. "The Incidence of Pollution Control Policies," Discussion Papers dp-05-24, Resources For the Future.
    3. Jette Jacobsen & Nick Hanley, 2009. "Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(2), pages 137-160, June.
    4. Drupp, Moritz A., 2016. "Limits to substitution between ecosystem services and manufactured goods and implications for social discounting," Economics Working Papers 2016-05, Christian-Albrechts-University of Kiel, Department of Economics.
    5. Gastineau, Pascal & Taugourdeau, Emmanuelle, 2014. "Compensating for environmental damages," Ecological Economics, Elsevier, vol. 97(C), pages 150-161.
    6. Huhtala, Anni & Pouta, Eija, 12. "Welfare Incidence of Subsidized Recreation Services in Finland," Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, Scandinavian Society of Forest Economics, issue 40, May.
    7. Meya, Jasper N. & Drupp, Moritz A. & Hanley, Nick, 2017. "Income inequality and the international transfer of environmental values," Economics Working Papers 2017-03, Christian-Albrechts-University of Kiel, Department of Economics.
    8. Huhtala, Anni & Pouta, Eija, 2008. "User fees, equity and the benefits of public outdoor recreation services," Journal of Forest Economics, Elsevier, vol. 14(2), pages 117-132, April.
    9. repec:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0040-4 is not listed on IDEAS
    10. Edward B. Barbier & Mikołaj Czajkowski & Nick Hanley, 2017. "Is the Income Elasticity of the Willingness to Pay for Pollution Control Constant?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 663-682.
    11. Stefan Baumgärtner & Alexandra Klein & Denise Thiel & Klara Winkler, 2015. "Ramsey Discounting of Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 273-296.
    12. Martini, Chiara & Tiezzi, Silvia, 2014. "Is the environment a luxury? An empirical investigation using revealed preferences and household production," Resource and Energy Economics, Elsevier, vol. 37(C), pages 147-167.
    13. Stina Hökby & Tore Söderqvist, 2003. "Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 361-383.
    14. repec:eee:jeeman:v:85:y:2017:i:c:p:35-61 is not listed on IDEAS
    15. repec:kap:enreec:v:69:y:2018:i:1:d:10.1007_s10640-016-0068-5 is not listed on IDEAS
    16. Udo Ebert & Georg Tillmann, 2006. "Budget Incidence Reconsidered," Journal of Economics, Springer, vol. 88(1), pages 1-19, June.
    17. Baumgärtner, Stefan & Drupp, Moritz A. & Meya, Jasper N. & Munz, Jan M. & Quaas, Martin F., 2016. "Income inequality and willingness to pay for public environmental goods," Economics Working Papers 2016-04, Christian-Albrechts-University of Kiel, Department of Economics.
    18. Solomon Hsiang & Paulina Oliva & Reed Walker, 2017. "The Distribution of Environmental Damages," NBER Working Papers 23882, National Bureau of Economic Research, Inc.

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