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The Role of Preferences in Disagreements over Scientific Hypothesis: An Empirical Inquiry into Environmental and Economic Decision Making

  • Mitesh Kataria

    ()

    (Max Planck Institute of Economics, Strategic Interaction Group, Jena)

The Porter hypothesis suggests that environmental regulations, such as restricting firms to reduce pollution, stimulates innovations and create a win-win situation for the environment and for firms. It has received a great deal of attention from academics as well as bureaucrats who disagree about the applicability of the Porter hypothesis. This study tests if part of such disagreement can be explained by a preference-expectation relationship and if people are more likely to believe in a scientific hypothesis that appeals to their preferences. The results show that individuals' who care more about the environment are more likely to believe in the Porter hypothesis. We also discuss the capacity of economic methodology to mitigate a preference-expectation bias and how it relates to the current practice in environmental economics.

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File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2010_088.pdf
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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-088.

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Date of creation: 13 Dec 2010
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Handle: RePEc:jrp:jrpwrp:2010-088
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  1. Daniel Bromley, 2004. "Reconsidering Environmental Policy: Prescriptive Consequentialism and Volitional Pragmatism," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(1), pages 73-99, May.
  2. Lovell, Michael C, 1983. "Data Mining," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 1-12, February.
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