Robert Östling: Institute for International Economic Studies, Postal: Stockholm University, SE-106 91 Stockholm, Sweden
Abstract: This paper extends standard consumer theory to account for endogenous moral motivation. Building on cognitive dissonance theory, I show how moral values are affected by changes in prices and income. The key insight is that changes in prices and income that lead to higher consumption of an immoral good also affect the moral values held by the consumer so that the good is considered less immoral. A preliminary empirical analysis based on the World Values Survey is consistent with the model's predictions with respect to income.
27 pages, First version: September 21, 2006. Revised: November 7, 2008. Earlier revisions: October 17, 2007, June 17, 2008, June 17, 2008, November 7, 2008.
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