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The endogenous formation of an environmental culture

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  • Ingmar Schumacher

    (Department of Economics, Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique, IPAG - Business School)

Abstract

We develop an overlapping generations model with environmental quality and endogenous environmental culture. Based upon empirical evidence, preferences over culturally-weighted consumption and envi- ronmental quality are assumed to follow a Leontie function. We fi nd that four diff erent regimes may be possible, with interior or corner solutions in investments in environmental culture and maintenance. Depending on the parameter conditions, there exists one of two possible, asymptotically stable steady states, one with and one without investments in environmental culture. For low wealth levels, society is unable to free resources for environmental culture. In this case, society will only invest in environmental maintenance if environmental quality is suffi ciently low. Once society has reached a certain level of economic development, then it may optimally invest a part of its wealth in developing an environmental culture. Environmental culture has not only a positive impact on environmental quality through lower levels of consumption, but it improves the environment through maintenance expenditure for wealth-environment combinations at which, in a restricted model without environmental culture, no maintenance would be undertaken. Environmental culture leads to a society with a higher indirect utility at steady state in comparison to the restricted model. Our model leads us to the conclusion that, by raising the importance of environmental quality for utility, environmental culture leads to lower steady state levels of consumption and wealth, but higher environmental quality. Thus, for societies trapped in a situation with low environmental quality, investments in culture may induce positive feedback loops, where more culture raises environmental quality which in turn raises environmental culture. We also discuss how en- vironmental culture may lead to an Environmental Kuznets Curve.

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  • Ingmar Schumacher, 2013. "The endogenous formation of an environmental culture," Working Papers hal-00834151, HAL.
  • Handle: RePEc:hal:wpaper:hal-00834151
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00834151
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    3. Ingmar Schumacher, 2014. "The Aggregation Dilemma," Working Papers 2014-224, Department of Research, Ipag Business School.
    4. Schumacher, Ingmar, 2015. "The endogenous formation of an environmental culture," European Economic Review, Elsevier, vol. 76(C), pages 200-221.
    5. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    6. Yiannis Kountouris & Kyriaki Remoundou, 2016. "Cultural Influence on Preferences and Attitudes for Environmental Quality," Kyklos, Wiley Blackwell, vol. 69(2), pages 369-397, May.
    7. Anastasia Litina & Simone Moriconi & Skerdilajda Zanaj, 2014. "The Cultural Transmission of Environmental Preferences: Evidence from International Migration," CREA Discussion Paper Series 14-12, Center for Research in Economic Analysis, University of Luxembourg.
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    12. Bezin, Emeline, 2015. "A cultural model of private provision and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 109-124.
    13. Fabien Prieur & Benteng Zou, 2017. "On the impact of indirect competition for political influence on environmental policy," CREA Discussion Paper Series 17-16, Center for Research in Economic Analysis, University of Luxembourg.

    More about this item

    Keywords

    endogenous preferences; environmental culture; overlapping generations model; environment; endogenous preferences.;

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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