IDEAS home Printed from https://ideas.repec.org/p/mse/wpsorb/v04099.html
   My bibliography  Save this paper

Pessimism or optimism : a justification to voluntary contributions toward environmental quality

Author

Listed:

Abstract

This arrticle analyzes the determinants of voluntary contribution to environmental quality by introducing the perception of the environmental risk. The environmental quality is assumed uncertain and influenced by current quality and individuals' contributions. We consider individuals who are aware both of the impact of their voluntary contributions and of the quality of the current environment on the future quality of environment. Agents' preferences are represented by the RDEU model. We show that the contribution level results from two effects : a wealth effect (environmental or financial) and a risk one. It appears that wealth effects (unless for extreme wealth levels) is not sufficient to explain the implication of agents in the improvement of the environmental quality and that risk and attitude towards risk should be taken into account.

Suggested Citation

  • Johana Etner & Meglena Jeleva, 2004. "Pessimism or optimism : a justification to voluntary contributions toward environmental quality," Cahiers de la Maison des Sciences Economiques v04099, Université Panthéon-Sorbonne (Paris 1).
  • Handle: RePEc:mse:wpsorb:v04099
    as

    Download full text from publisher

    File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/V04099.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. William T. Harbaugh & Arik Levinson & David Molloy Wilson, 2002. "Reexamining The Empirical Evidence For An Environmental Kuznets Curve," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 541-551, August.
    3. John C. Whitehead & Thomas J. Hoban, 1999. "Testing for Temporal Reliability in Contingent Valuation with Time for Changes in Factors Affecting Demand," Land Economics, University of Wisconsin Press, vol. 75(3), pages 453-465.
    4. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    5. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
    6. Eeckhoudt, Louis R. & Hammitt, James K., 2004. "Does risk aversion increase the value of mortality risk?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 13-29, January.
    7. Roell, Ailsa A, 1987. "Risk Aversion in Quiggin and Yaari's Rank-Order Model of Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 97(388a), pages 143-159, Supplemen.
    8. Chateauneuf, Alain & Cohen, Michele, 1994. "Risk Seeking with Diminishing Marginal Utility in a Non-expected Utility Model," Journal of Risk and Uncertainty, Springer, vol. 9(1), pages 77-91, July.
    9. Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 195-208, May.
    10. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    11. Jouvet, Pierre-Andre & Michel, Philippe & Pestieau, Pierre, 2000. "Altruism, Voluntary Contributions and Neutrality: The Case of Environmental Quality," Economica, London School of Economics and Political Science, vol. 67(268), pages 465-475, November.
    12. Pierre-André Jouvet, 1998. "Voluntary Contributions with Uncertainty: The Environmental Quality," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 23(2), pages 151-165, December.
    13. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 353-377.
    14. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    15. Cameron, Trudy Ann, 2005. "Individual option prices for climate change mitigation," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 283-301, February.
    16. Susmita Dasgupta & Benoit Laplante & Hua Wang & David Wheeler, 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter.
    17. Torras, Mariano & Boyce, James K., 1998. "Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 25(2), pages 147-160, May.
    18. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    19. Rothschild, Michael & Stiglitz, Joseph E., 1971. "Increasing risk II: Its economic consequences," Journal of Economic Theory, Elsevier, vol. 3(1), pages 66-84, March.
    20. Gollier, Christian & Jullien, Bruno & Treich, Nicolas, 2000. "Scientific progress and irreversibility: an economic interpretation of the 'Precautionary Principle'," Journal of Public Economics, Elsevier, vol. 75(2), pages 229-253, February.
    21. Philippe Michel & Gilles Rotillon, 1995. "Disutility of pollution and endogenous growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(3), pages 279-300, October.
    22. Graciela Chichilnisky & Geoffrey Heal, 1993. "Global Environmental Risks," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 65-86, Fall.
    23. Quiggin, John, 1991. "Comparative Statics for Rank-Dependent Expected Utility Theory," Journal of Risk and Uncertainty, Springer, vol. 4(4), pages 339-350, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Etner, Johanna & Jeleva, Meglena & Jouvet, Pierre-Andre, 2007. "Risk perceptions, voluntary contributions and environmental policy," Research in Economics, Elsevier, vol. 61(3), pages 130-139, September.
    2. Benjamin Ouvrard & Sandrine Spaeter, 2016. "Environmental Incentives: Nudge or Tax?," Working Papers of BETA 2016-23, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. Kene Boun My & Benjamin Ouvrard, 2017. "Nudge and Tax in an Environmental Public Goods Experiment: Does Environmental Sensitivity Matter?," Working Papers of BETA 2017-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Benjamin Ouvrard & Sandrine Spaeter, 2016. "Environmental Incentives: Nudge or Tax?," Working Papers 2016.15, FAERE - French Association of Environmental and Resource Economists.

    More about this item

    Keywords

    Risk perception; pessimism; optimism; environmental quality.;

    JEL classification:

    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • D69 - Microeconomics - - Welfare Economics - - - Other
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mse:wpsorb:v04099. 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: (Lucie Label). General contact details of provider: http://edirc.repec.org/data/msep1fr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.