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Impure Public Goods and the Comparative Statics of Environmentally Friendly Consumption

This paper develops an impure public good model to analyze the comparative statics of environmentally friendly consumption. “Green” products are treated as impure public goods that arise through joint production of a private characteristic and an environmental public characteristic. The model is distinct from existing impure public good models because it considers the availability of substitutes. Specifically, the model accounts for the way that the jointly produced characteristics of a green product may be available separately as well—through a conventional-good substitute, direct donations to improve environmental quality, or both. The analysis provides a theoretical foundation for understanding how demand for green products and demand for environmental quality depend on market prices, green-production technologies, and ambient environmental quality. The comparative static results generate new insights into the important and sometimes counterintuitive relationship between demand for green products and demand for environmental quality.

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File URL: http://web.williams.edu/Economics/wp/kotchencompstat.pdf
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Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2003-06.

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Date of creation: Sep 2003
Date of revision:
Publication status: published in Journal of Environmental Economics and Management, March 2005, v. 49, iss. 2, pp. 281-300
Handle: RePEc:wil:wileco:2003-06
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  1. Cesare Dosi & Michele Moretto, 2001. "Is Ecolabelling a Reliable Environmental Policy Measure?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(1), pages 113-127, January.
  2. Rubbelke, Dirk T. G., 2003. "An analysis of differing abatement incentives," Resource and Energy Economics, Elsevier, vol. 25(3), pages 269-294, August.
  3. Jeffrey R. Blend & Eileen O. van Ravenswaay, 1999. "Measuring Consumer Demand for Ecolabeled Apples," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1072-1077.
  4. Tom Tietenberg, 1998. "Disclosure Strategies for Pollution Control," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 587-602, April.
  5. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  6. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
  7. Murdoch, James C. & Sandler, Todd, 1984. "Complementarity, free riding, and the military expenditures of NATO allies," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 83-101, November.
  8. 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.
  9. Cathy R. Wessells & Robert J. Johnston & Holger Donath, 1999. "Assessing Consumer Preferences for Ecolabeled Seafood: The Influence of Species, Certifier, and Household Attributes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1084-1089.
  10. Mario F. Teisl & Brian Roe & Alan S. Levy, 1999. "Ecocertification: Why It May Not Be a “Field of Dreams”," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1066-1071.
  11. Wesley Nimon & John Beghin, 1999. "Ecolabels and International Trade in the Textile and Apparel Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1078-1083.
  12. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  13. Stephen K. Swallow & Roger A. Sedjo, 2000. "Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment," Land Economics, University of Wisconsin Press, vol. 76(1), pages 28-36.
  14. 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.
  15. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
  16. repec:cup:cbooks:9780521477185 is not listed on IDEAS
  17. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-98, September.
  18. Vicary, Simon, 1997. "Joint production and the private provision of public goods," Journal of Public Economics, Elsevier, vol. 63(3), pages 429-445, February.
  19. Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May.
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