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Consumer Behaviour with Environmental and Social Externalities: Implications for Analysis and Policy

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Listed:
  • Partha Dasgupta

    (University of Cambridge
    University of Manchester)

  • Dale Southerton

    (University of Manchester)

  • Alistair Ulph

    (University of Manchester)

  • David Ulph

    (University of St Andrews)

Abstract

In this paper we summarise some of our recent work on consumer behaviour, drawing on recent developments in behavioural economics, particularly linked to sociology as much as psychology, in which consumers are embedded in a social context, so their behaviour is shaped by their interactions with other consumers. For the purpose of this paper we also allow consumption to cause environmental damage. Analysing the social context of consumption naturally lends itself to the use of game theoretic tools. We shall be concerned with two ways in which social interactions affect consumer preferences and behaviour: socially-embedded preferences, where the behaviour of other consumers affect an individual’s preferences and hence consumption (we consider two examples: conspicuous consumption and consumption norms) and socially-directed preferences where people display altruistic behaviour. Our aim is to show that building links between sociological and behavioural economic approaches to the study of consumer behaviour can lead to significant and surprising implications for conventional economic analysis and policy prescriptions, especially with respect to environmental policy.

Suggested Citation

  • Partha Dasgupta & Dale Southerton & Alistair Ulph & David Ulph, 2016. "Consumer Behaviour with Environmental and Social Externalities: Implications for Analysis and Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 191-226, September.
  • Handle: RePEc:kap:enreec:v:65:y:2016:i:1:d:10.1007_s10640-015-9911-3
    DOI: 10.1007/s10640-015-9911-3
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    5. Thomas Eichner & Rüdiger Pethig, 2022. "International Environmental Agreements When Countries Behave Morally," CESifo Working Paper Series 10090, CESifo.
    6. Mattauch, Linus & Hepburn, Cameron & Stern, Nicholas, 2018. "Pigou pushes preferences: decarbonisation and endogenous values," INET Oxford Working Papers 2018-16, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
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    9. Konc, Théo & Savin, Ivan & van den Bergh, Jeroen C.J.M., 2021. "The social multiplier of environmental policy: Application to carbon taxation," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    10. Treich, Nicolas & Espinosa, Romain, 2024. "The Animal-Welfare Levy," TSE Working Papers 24-1503, Toulouse School of Economics (TSE).
    11. Alistair Ulph & David Ulph, 2023. "International Cooperation and Kantian Moral Behaviour – Complements or Substitutes?," Economics Discussion Paper Series 2302, Economics, The University of Manchester.
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    15. Dina KASSAB, 2018. "Corporate Social Responsibility and Regulation: Taxing Ethical behaviour," Working Papers 2018.17, FAERE - French Association of Environmental and Resource Economists.
    16. Burani, Nadia & Mantovani, Andrea, 2024. "Environmental policies with green network effect and price discrimination," TSE Working Papers 24-1513, Toulouse School of Economics (TSE), revised Jul 2024.
    17. Daria S. Benz, 2019. "Modelling of environmental and economic efficiency: A case of the Ural region," Journal of New Economy, Ural State University of Economics, vol. 20(4), pages 70-87, September.
    18. Jibonayan Raychaudhuri & Ada Wossink, 2018. "Ecolabels and The Economic Recession," Economics Discussion Paper Series 1807, Economics, The University of Manchester.
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    21. Bazoche, Pascale & Guinet, Nicolas & Poret, Sylvaine & Teyssier, Sabrina, 2021. "Does the provision of information increase the substitution of animal proteins with plant-based proteins? An experimental investigation into consumer choices," Working Papers 313663, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    22. Pascale Bazoche & Nicolas Guinet & Sylvaine Poret & Sabrina Teyssier, 2021. "Does the provision of information increase the substitution of animal proteins with plant-based proteins? An experimental investigation into consumer choices [L’apport d’informations augmente-t-il ," Working Papers hal-03350356, HAL.
    23. Bazoche, Pascale & Guinet, Nicolas & Poret, Sylvaine & Teyssier, Sabrina, 2023. "Does the provision of information increase the substitution of animal proteins with plant-based proteins? An experimental investigation into consumer choices," Food Policy, Elsevier, vol. 116(C).
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    25. Lipari, Francesca & Lázaro-Touza, Lara & Escribano, Gonzalo & Sánchez, Ángel & Antonioni, Alberto, 2024. "When the design of climate policy meets public acceptance: An adaptive multiplex network model," Ecological Economics, Elsevier, vol. 217(C).

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    More about this item

    Keywords

    Consumer behaviour; Social context; Environmental policy; Game theory; Competitive consumption; Consumption norms; Altruism; Moral behaviour; Kantian calculus;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Z1 - Other Special Topics - - Cultural Economics

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