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Community Pressure for Green Behaviour

Author

Listed:
  • Anthony Heyes

    (University of Ottawa)

  • Sandeep Kapur

    (Department of Economics, Mathematics & Statistics, Birkbeck)

Abstract

The desire to avoid rousing community hostility may encourage firms to behave in an environmentally responsible manner. It has been conjectured that such 'informal regulation' could effectively replace formal intervention in some settings, and usefully complement it in others. We explore these conjectures with mixed results. Informal regulation is necessarily less efficient than a well-designed formal alternative and the pattern of green behaviour induced by the threat of community hostility may increase or decrease welfare. The existence of community pressure may increase or decrease the optimal calibration of a formal intervention (in this case an environmental tax) and may complement or detract from the incentives generated by an optimally-calibrated tax.

Suggested Citation

  • Anthony Heyes & Sandeep Kapur, 2012. "Community Pressure for Green Behaviour," Birkbeck Working Papers in Economics and Finance 1207, Birkbeck, Department of Economics, Mathematics & Statistics.
  • Handle: RePEc:bbk:bbkefp:1207
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    References listed on IDEAS

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    Cited by:

    1. Anthony Heyes & Marcel Oestreich, 2017. "The Optimal NGO Chief: Strategic Delegation in Social Advocacy," Working Papers 1701, Brock University, Department of Economics.

    More about this item

    Keywords

    community pressure; informal regulation; compliance; enforcement;

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