Green consumption: The role of confidence and pessimism

Maria J. Montoya-Villalobos

Ecological Economics, 2023, vol. 205, issue C

Abstract: This paper proposes a green consumption model under non-probabilized uncertainty surrounding the environmental benefits of green goods. We study the theoretical implications of the introduction of non-probabilized uncertainty (ambiguity) and attitudes towards uncertainty: confidence (belief about the veracity of the available information) and pessimism (consumer’s probability estimation of the realization of the worst possible outcome when consuming green goods). We analyze their respective impact on green consumption and consider individuals with heterogeneous beliefs. Pessimism has a negative impact on green demand; meanwhile, an increase in confidence does not always imply an increase in green demand, it depends on the level of pessimism. We determine the impact of uncertainty and beliefs on the equilibrium and the socially optimal level of private voluntary provision. We find that under uncertainty, the individual level of green consumption at the Nash equilibrium may be greater than the individual level at the social optimum.

Keywords: Green consumption; Impure public goods; Confidence; Pessimism; Ambiguity (search for similar items in EconPapers)
JEL-codes: D83 D9 H41 Q5 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921800922003949
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:205:y:2023:i:c:s0921800922003949

DOI: 10.1016/j.ecolecon.2022.107733

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().