Green Markets and Private Provision of Public Goods
This paper develops a general model of private provision of a public good that includes the option to consume an impure public good. I use the model to investigate positive and normative consequences of "green markets." Green markets give consumers a new choice: instead of simply consuming a private good and making a donation to an environmental public good, consumers can purchase an impure public good that produces characteristics of both activities jointly. Many governments, nongovernmental organizations, and industries promote green markets as a decentralized mechanism of environmental policy. Nevertheless, I show that under quite reasonable assumptions, green markets can have detrimental effects on both environmental quality and social welfare. I then derive conditions that are sufficient to rule out such unintended consequences. The analysis applies equally to non-environmental choice settings where the joint products of an impure public good are also available separately. Such choice settings are increasingly prevalent in the economy, with impure public goods ranging from socially-responsible investments to commercial activities associated with charitable fund-raising.
|Date of creation:||Apr 2003|
|Publication status:||published in Journal of Political Economy, August 2006, v. 114, iss. 4, pp. 816-34|
|Contact details of provider:|| Postal: Williamstown, MA 01267|
Phone: 413 597 2476
Fax: 413 597 4045
Web page: http://econ.williams.edu
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
- David C. Ribar & Mark O. Wilhelm, 2002.
"Altruistic and Joy-of-Giving Motivations in Charitable Behavior,"
Journal of Political Economy,
University of Chicago Press, vol. 110(2), pages 425-457, April.
- Riber, D.C. & Wilhelm, M.O., 1996. "Altruistic and Joy-of-Giving Motivations in Charitable Behavior," Papers 1-96-4, Pennsylvania State - Department of Economics.
- Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
- Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:wil:wileco:2003-05. 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: (Stephen Sheppard)
If references are entirely missing, you can add them using this form.