Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 759: Can the environment be an inferior good? A theory with context-dependent substitutability and needs
Marion Dupoux () and Vincent Martinet
Additional contact information
Marion Dupoux: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden
Vincent Martinet: Economie Publique, AgroParisTech, INRA, University of Paris-Saclay
Abstract: Theoretical models often assume the environment to be a normal good, irrespective of one’s income. However, a priori, nothing prohibits an environmental good from being normal for some individuals and inferior for others. We develop a conceptual framework in which private consumption and an environmental public good act as substitutes or com-plements for satisfying different needs. Subsequently, the environment can switch between normal and inferior depending on one’s income and environment. If the environment is in-ferior for some range of income, then the willingness to pay for environmental preservation becomes non-monotonic, thereby having implications for benefit transfers.
Keywords: substitutability; environmental public goods; context; willingness to pay; inferior goods; needs
43 pages, April 2019
Full text files
60061 HTML file Full text
Questions (including download problems) about the papers in this series should be directed to Jessica Oscarsson ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:gunwpe:0759This page generated on 2024-11-14 18:33:28.