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External Habits Formation and the Environment

Author

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  • Safi Fatma

    (University of Sfax, Faculty of Economics and Management, Department of Economics, Tunisia)

Abstract

The present paper presents a standard overlapping generations model with external habits formation and environmental quality in the utility function. Our main objective is to study the impact of external habits on capital accumulation and environmental quality on the intertemporal competitive equilibrium. We notice that striving for status leads to environment worsening and capital increasing when the cohort size is large.

Suggested Citation

  • Safi Fatma, 2021. "External Habits Formation and the Environment," Naše gospodarstvo/Our economy, Sciendo, vol. 67(1), pages 1-12, March.
    • Handle: RePEc:vrs:ngooec:v:67:y:2021:i:1:p:1-12:n:6
    DOI: 10.2478/ngoe-2021-0001
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    More about this item

    Keywords

    external habits; overlapping generations; environmental quality;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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