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Are we turning a brighter shade of green? The relationship between household characteristics and greenhouse gas emissions from consumption in New Zealand

Author

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  • Corey Allan

    (Motu Economic and Public Policy Research)

  • Suzi Kerr

    (Motu Economic and Public Policy Research)

  • Campbell Will

    (Motu Economic and Public Policy Research)

Abstract

We test whether New Zealand households have become greener consumers by estimating environmental Engel curves (EECs), which describe the relationship between household income and the pollution embodied in a household’s consumption bundle. Our pollutants of interest are greenhouse gases (GHGs). To our knowledge, this is the first paper that tests for a change over time in climate change-related household behaviour. We calculate the greenhouse gases embodied in household consumption bundles using standard environmental input-output (IO) analysis combined with detailed household expenditure data from the 2006/07 and 2012/13 waves of the New Zealand Household Economic Survey. Consistent with international literature, we find that emissions increase less-than-proportionately with household expenditure (a proxy for permanent income). There is significant variation in expenditure elasticities across consumption categories; emissions from household energy are unresponsive to household expenditure, while emissions from transport are highly responsive to expenditure. Household expenditure and composition explain the majority of the cross-sectional variation in household emissions. We conduct a simple test for changes over time in household consumption patterns that affect emissions, taking price changes into account. We find that, controlling for a rich set of household characteristics, household emissions were marginally lower on average in the 2012/13 survey than the 2006/07 survey. This result is largely driven by a reduction in emissions from household energy. We also find that wealthier households had a smaller reduction in emissions between surveys. Our results suggest this is due to higher levels of international air travel by wealthier households.

Suggested Citation

  • Corey Allan & Suzi Kerr & Campbell Will, 2015. "Are we turning a brighter shade of green? The relationship between household characteristics and greenhouse gas emissions from consumption in New Zealand," Working Papers 15_06, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:15_06
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    References listed on IDEAS

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    Cited by:

    1. Arik Levinson & James O'Brien, 2015. "Environmental Engel Curves," NBER Working Papers 20914, National Bureau of Economic Research, Inc.
    2. Claire Brunel & Arik Levinson, 2021. "Globalization and Greenhouse Gas Emissions: Evidence from the United States," NBER Working Papers 28372, National Bureau of Economic Research, Inc.
    3. Azalia Mohamed & Zelina Zaiton Ibrahim & Abu Daud Silong & Ramdzani Abdullah, 2016. "Distributed Leadership in a Low-Carbon City Agenda," Sustainability, MDPI, vol. 8(8), pages 1-21, July.
    4. Marco Baudino, 2020. "Environmental Engel curves in Italy: A spatial econometric investigation," Papers in Regional Science, Wiley Blackwell, vol. 99(4), pages 999-1018, August.

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    More about this item

    Keywords

    Climate change; greenhouse gas emissions; household behaviour; consumption; input–output model;
    All these keywords.

    JEL classification:

    • 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
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis

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