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Sustainability and the Problem of Consumption

Author

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  • Ulrich Witt

Abstract

Strong growth in disposable income has inflated consumption to unprecedented, but not sustainable levels. In this process consumer behavior has been changing. To explain the driving forces of this development, the paper introduces a theory of evolving consumer preferences that is molded in an evolutionary paradigm. The theory allows to better assess how individual welfare would be directly affected by policy measures designed to make consumption sustainable. Such policy measures are likely to also trigger indirect welfare losses by negative employment effects. The policy debate therefore needs to pay attention to both direct and indirect welfare effects. As a concrete proposal a redesign of consumption taxes is discussed that accounts for both concerns.

Suggested Citation

  • Ulrich Witt, 2011. "Sustainability and the Problem of Consumption," Papers on Economics and Evolution 2011-16, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2011-16
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    File URL: ftp://137.248.191.199/RePEc/esi/discussionpapers/2011-16.pdf
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    References listed on IDEAS

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    1. Ropke, Inge, 1999. "The dynamics of willingness to consume," Ecological Economics, Elsevier, vol. 28(3), pages 399-420, March.
    2. Norton, Bryan & Costanza, Robert & Bishop, Richard C., 1998. "The evolution of preferences: Why 'sovereign' preferences may not lead to sustainable policies and what to do about it," Ecological Economics, Elsevier, vol. 24(2-3), pages 193-211, February.
    3. Baumgärtner, Stefan & Quaas, Martin, 2010. "What is sustainability economics?," Ecological Economics, Elsevier, vol. 69(3), pages 445-450, January.
    4. Corinna Manig & Alessio Moneta, 2014. "More or better? Measuring quality versus quantity in food consumption," Journal of Bioeconomics, Springer, vol. 16(2), pages 155-178, July.
    5. Binswanger, Mathias, 2006. "Why does income growth fail to make us happier?: Searching for the treadmills behind the paradox of happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 366-381, April.
    6. Martínez-Alier, Joan & Pascual, Unai & Vivien, Franck-Dominique & Zaccai, Edwin, 2010. "Sustainable de-growth: Mapping the context, criticisms and future prospects of an emergent paradigm," Ecological Economics, Elsevier, vol. 69(9), pages 1741-1747, July.
    7. Ulrich Witt, 2006. "Evolutionary Economics," Papers on Economics and Evolution 2006-05, Philipps University Marburg, Department of Geography.
    8. Ayres, Robert U., 2008. "Sustainability economics: Where do we stand?," Ecological Economics, Elsevier, vol. 67(2), pages 281-310, September.
    9. Meyer, Bernd & Distelkamp, Martin & Wolter, Marc Ingo, 2007. "Material efficiency and economic-environmental sustainability. Results of simulations for Germany with the model PANTA RHEI," Ecological Economics, Elsevier, vol. 63(1), pages 192-200, June.
    10. Sorrell, Steve, 2009. "Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency," Energy Policy, Elsevier, vol. 37(4), pages 1456-1469, April.
    11. Røpke, Inge, 2009. "Theories of practice -- New inspiration for ecological economic studies on consumption," Ecological Economics, Elsevier, vol. 68(10), pages 2490-2497, August.
    12. Andreas Chai & Alessio Moneta, 2010. "Retrospectives: Engel Curves," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 225-240, Winter.
    13. Gowdy, John, 2005. "Toward a new welfare economics for sustainability," Ecological Economics, Elsevier, vol. 53(2), pages 211-222, April.
    14. Richard J. Herrnstein & Drazen Prelec, 1991. "Melioration: A Theory of Distributed Choice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 137-156, Summer.
    15. Russell, Clifford S., 2001. "Applying Economics to the Environment," OUP Catalogue, Oxford University Press, number 9780195126846.
    16. Ulrich Witt & Christian Schubert, 2010. "Extending the Informational Basis of Welfare Economics: The Case of Preference Dynamics," Papers on Economics and Evolution 2010-05, Philipps University Marburg, Department of Geography.
    17. Jackson, Tim & Marks, Nic, 1999. "Consumption, sustainable welfare and human needs--with reference to UK expenditure patterns between 1954 and 1994," Ecological Economics, Elsevier, vol. 28(3), pages 421-441, March.
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    Cited by:

    1. Leonhard Lades, 2013. "Explaining shapes of Engel curves: the impact of differential satiation dynamics on consumer behavior," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1023-1045, November.

    More about this item

    Keywords

    consumption; preferences; growth; sustainability; satiation; welfare; consumption tax;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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