Health-enhancing activities and the environment:How competition for resources make the environmental policy beneficial
In a two-period overlapping generations model, this paper demonstrates that the relationship between environmental taxation and economic activity (output level and output growth) becomes inverted-U shaped when the detrimental impact of pollution on health and the private decision of each working-age agent to improve her health are taken into account. In particular, a tighter environmental tax is more likely to promote (rather than to harm) output-level and -growth when health is very sensitive to pollution, the weight of health in preferences is high, the polluting capacity of the production technology is high and the rate of natural purification of pollutants is low. The inverted-U shaped relationship between environmental tax and economic activity is due to a positive effect arising from the competition for resources between the final output sector and the health-enhancing activities. This offsets the conventional detrimental “drag-down effect” for low values of the environmental tax. We also demonstrate that the link between environmental tax and lifetime welfare is inverted-U shaped as well. Finally, we investigate the social optimum and the determinants of the optimal environmental tax.
|Date of creation:||2009|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00423323/en/|
|Contact details of provider:|| Web page: http://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
- Gutiérrez Huerta, María José, 2002.
"Dynamic Inefficiency in an Overlapping Generation Economy with Pollution and Health Costs,"
DFAEII Working Papers
2002-23, University of the Basque Country - Department of Foundations of Economic Analysis II.
- Mar�A-José Gutiérrez, 2008. "Dynamic Inefficiency in an Overlapping Generation Economy with Pollution and Health Costs," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(4), pages 563-594, 08.
- María José Gutiérrez, 2004. "Dynamic Inefficiency in an Overlapping Generation Economy with Pollution and Health Costs," Economic Working Papers at Centro de Estudios Andaluces E2004/38, Centro de Estudios Andaluces.
- Rosa Aísa & Fernando Pueyo, 2004. "Endogenous longevity, health and economic growth: a slow growth for a longer life?," Economics Bulletin, AccessEcon, vol. 9(3), pages 1-10.
- Cropper, M L, 1981. "Measuring the Benefits from Reduced Morbidity," American Economic Review, American Economic Association, vol. 71(2), pages 235-40, May.
- Suhrcke, Marc & Pelgrin, Florian & Oliveira Martins, Joaquim & Dormont, Brigitte, 2007.
"Health expenditures, longevity and growth,"
Economics Papers from University Paris Dauphine
123456789/3882, Paris Dauphine University.
- Brigitte Dormont & Michel Grignon & Hélène Huber, 2006.
"Health expenditure growth : reassessing the threat of ageing,"
- Brigitte Dormont & Michel Grignon & Hélène Huber, 2006. "Health expenditure growth: reassessing the threat of ageing," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 947-963.
- Huber, Hélène & Grignon, Michel & Dormont, Brigitte, 2006. "Health expenditure growth : reassessing the threat of ageing," Economics Papers from University Paris Dauphine 123456789/3881, Paris Dauphine University.
- Shapiro, Jesse & Glaeser, Edward & Cutler, David, 2003.
"Why Have Americans Become More Obese,"
2640583, Harvard University Department of Economics.
- David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
- David M. Cutler & Edward L. Glaeser & Jesse M. Shapiro, 2003. "Why Have Americans Become More Obese?," Harvard Institute of Economic Research Working Papers 1994, Harvard - Institute of Economic Research.
- repec:ebl:ecbull:v:9:y:2004:i:3:p:1-10 is not listed on IDEAS
- Jonathan S. Skinner & Elliott S. Fisher & John Wennberg, 2005.
"The Efficiency of Medicare,"
in: Analyses in the Economics of Aging, pages 129-160
National Bureau of Economic Research, Inc.
- van Zon, Adriaan & Muysken, Joan, 2001. "Health and endogenous growth," Journal of Health Economics, Elsevier, vol. 20(2), pages 169-185, March.
- Kemp, Murray C & Long, Ngo Van, 1979. "The Under- Exploitation of Natural Resources: A Model with Overlapping Generations," The Economic Record, The Economic Society of Australia, vol. 55(150), pages 214-21, September.
- Mourmouras, Alex, 1991. " Competitive Equilibria and Sustainable Growth in a Life-Cycle Model with Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(4), pages 585-91.
- Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
- Mariani, Fabio & Pérez-Barahona, Agustín & Raffin, Natacha, 2009.
"Life Expectancy and the Environment,"
IZA Discussion Papers
4564, Institute for the Study of Labor (IZA).
- Fabio Mariani & AGUSTIN PÃ©rez-Barahona & Natacha Raffin, 2010. "Life expectancy and the environment," Working Papers 39456, Institut National de la Recherche Agronomique, France.
- Fabio Mariani & Agustin Pérez-Barahona & Natacha Raffin, 2008. "Life expectancy and the environment," Documents de travail du Centre d'Economie de la Sorbonne v08048, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- X. Pautrel, 2008. "Reconsidering the Impact of the Environment on Long-run Growth when Pollution Influences Health and Agents have a Finite-lifetime," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(1), pages 37-52, May.
- Gutiérrez Huerta, María José & Iza Padilla, María Amaya & Agnani, Betty, 2002.
"Growth in Overlapping Generation Economies with Non-Renewable Resources,"
DFAEII Working Papers
2002-22, University of the Basque Country - Department of Foundations of Economic Analysis II.
- Agnani, Betty & Gutierrez, Maria-Jose & Iza, Amaia, 2005. "Growth in overlapping generation economies with non-renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 387-407, September.
- Zon A.H. van & Muysken J., 1997. "Health, education and endogenous growth," Research Memorandum 006, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- repec:cup:cbooks:9780521001151 is not listed on IDEAS
- Xavier Pautrel, 2006. "Reconsidering The Impact of Environment on Long-Run Growth When Pollution Influences Health and Agents Have Finite-Lifetime," Working Papers 2006.93, Fondazione Eni Enrico Mattei.
- Williams, Roberton III, 2002.
"Environmental Tax Interactions when Pollution Affects Health or Productivity,"
Journal of Environmental Economics and Management,
Elsevier, vol. 44(2), pages 261-270, September.
- Roberton C. Williams, 2000. "Environmental Tax Interactions When Pollution Affects Health or Productivity," NBER Working Papers 8049, National Bureau of Economic Research, Inc.
- John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
- Darius Lakdawalla & Dana Goldman & Jay Bhattacharya, 2001. "Are the Young Becoming More Disabled?," NBER Working Papers 8247, National Bureau of Economic Research, Inc.
- Tomas Philipson & Richard Posner, 2008. "Is the Obesity Epidemic a Public Health Problem? A Decade of Research on the Economics of Obesity," NBER Working Papers 14010, National Bureau of Economic Research, Inc.
- Zhang, Xiaohui & Zhao, Xueyan & Harris, Anthony, 2009. "Chronic diseases and labour force participation in Australia," Journal of Health Economics, Elsevier, vol. 28(1), pages 91-108, January.
- Mourmouras, Alex, 1993. "Conservationist government policies and intergenerational equity in an overlapping generations model with renewable resources," Journal of Public Economics, Elsevier, vol. 51(2), pages 249-268, June.
- Williams III, Roberton C., 2003. "Health effects and optimal environmental taxes," Journal of Public Economics, Elsevier, vol. 87(2), pages 323-335, February.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- John Mullahy & Stephanie A. Robert, 2008. "No Time to Lose? Time Constraints and Physical Activity," NBER Working Papers 14513, National Bureau of Economic Research, Inc.
- Fabio Mariani & Agustin Pérez-Barahona & Natacha Raffin, 2008. "Life expectancy and the environment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00318677, HAL.
- Pautrel, Xavier, 2009. "Pollution and life expectancy: How environmental policy can promote growth," Ecological Economics, Elsevier, vol. 68(4), pages 1040-1051, February.
- repec:cup:cbooks:9780521806428 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-00423323. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.