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Economic Influences on Moral Values

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Abstract

This paper extends standard consumer theory to account for endogenous moral motivation. Building on cognitive dissonance theory, I show how moral values are affected by changes in prices and income. The key insight is that changes in prices and income that lead to higher consumption of an immoral good also affect the moral values held by the consumer so that the good is considered less immoral. A preliminary empirical analysis based on the World Values Survey is consistent with the model's predictions with respect to income.

Suggested Citation

  • Östling, Robert, 2006. "Economic Influences on Moral Values," SSE/EFI Working Paper Series in Economics and Finance 635, Stockholm School of Economics, revised 07 Nov 2008.
  • Handle: RePEc:hhs:hastef:0635
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    Cited by:

    1. Heinz Welsch & Jan Kühling, 2016. "Green status seeking and endogenous reference standards," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 625-643, October.
    2. James Alm & Benno Torgler, 2011. "Do Ethics Matter? Tax Compliance and Morality," Journal of Business Ethics, Springer, vol. 101(4), pages 635-651, July.
    3. Shafiq, M. Najeeb, 2015. "Aspects of Moral Change in India, 1990–2006: Evidence from Public Attitudes toward Tax Evasion and Bribery," World Development, Elsevier, vol. 68(C), pages 136-148.
    4. Nordblom, Katarina & Zamac, Jovan, 2011. "Endogenous Norm Formation Over the Life Cycle – The Case of Tax Evasion," Working Paper Series 2011:13, Uppsala University, Department of Economics.
    5. Martin Halla & Friedrich G. Schneider, 2005. "Taxes and Benefits: Two Distinct Options to Cheat on the State?," Economics working papers 2005-05, Department of Economics, Johannes Kepler University Linz, Austria.

    More about this item

    Keywords

    Consumer theory; moral values; endogenous preferences; cognitive dissonance; self-serving bias;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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