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

Author

Listed:
  • Heinz Welsch

    () (University of Oldenburg, Department of Economics)

  • Jan Kühling

    () (University of Oldenburg, Department of Economics)

Abstract

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.

Suggested Citation

  • Heinz Welsch & Jan Kühling, 2010. "Is Pro-Environmental Consumption Utility-Maximizing? Evidence from Subjective Well-Being Data," Working Papers V-322-10, University of Oldenburg, Department of Economics, revised Apr 2010.
  • Handle: RePEc:old:dpaper:322
    as

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    File URL: http://www.vwl.uni-oldenburg.de/download/V-322-10.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    pro-environmental; consumption; consumer choice; utility maximization; wellbeing life satisfaction;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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