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Is Pro-Environmental Consumption Utility-Maximizing? Evidence from Subjective Well-Being Data

  • Heinz Welsch

    ()

    (University of Oldenburg, Department of Economics)

  • Jan Kühling

    ()

    (University of Oldenburg, Department of Economics)

This paper studies whether pro-environmental consumption choices are consistent with utility maximization and what role the consumption behavior of reference persons and one’s own past behavior play in this context. By combining data on individuals’ pro-environmental consumption from a unique data set with data on subjective well-being, we find that people could attain higher well-being (utility) by unilaterally consuming more environmentally friendly while at the same time reducing the quantity consumed. The distortions identified are smaller when people’s reference persons consume more environmentally friendly and when the individual has a longer environmental friendly consumption history. We therefore conclude that learning from the behavior of others and from one’s own past experience may help alleviate decision error in environment-friendly consumption.

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File URL: http://www.vwl.uni-oldenburg.de/download/V-322-10.pdf
File Function: First version, 2010
Download Restriction: no

Paper provided by University of Oldenburg, Department of Economics in its series Working Papers with number V-322-10.

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Length: 36 pages
Date of creation: Apr 2010
Date of revision: Apr 2010
Publication status: Published in Oldenburg Working Papers V-322-10
Handle: RePEc:old:dpaper:322
Contact details of provider: Postal: 26111 Oldenburg
Phone: +49 441 798-4107
Fax: +49 441 798-4116
Web page: http://www.vwl.uni-oldenburg.de/
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