The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries

Donatella Baiardi, Matteo Manera () and Mario Menegatti

No 271, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: This paper empirically estimates a micro-founded model which studies the macroeconomic impact of environmental and financial risks on consumption choices in the Mediterranean Region. The analysis is carried out using time series aggregate data for fourteen Mediterranean countries over the period 1965-2008. Our results indicate that both risks and their interaction significantly influence consumption dynamics. Our estimates of the indexes of relative risk aversion and relative prudence, as well as the relative preference for the quality of environment suggest marked cross-country heterogeneity.

Keywords: Consumption; environmental risk; financial risk; prudence; relative risk aversion; relative preference for the quality of environment (search for similar items in EconPapers)
JEL-codes: D81 E21 Q50 (search for similar items in EconPapers)
Pages: 22
Date: 2014-04, Revised 2014-04
New Economics Papers: this item is included in nep-env, nep-mac and nep-upt
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http://repec.dems.unimib.it/repec/pdf/mibwpaper271.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries (2014)
Working Paper: The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries (2014)
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