Negative externalities, defensive expenditures and labour supply in an evolutionary context

Angelo Antoci and Stefano Bartolini

Environment and Development Economics, 2004, vol. 9, issue 05, pages 591-612

Abstract: In this model, well-being depends on leisure, on an environmental renewable resource, and on a non-storable output, which can substitute for the environmental resource or can satisfy needs different from those satisfied by the resource. Individuals have free access to the environmental resource, which is subject to negative externalities: that is, is depleted by the production and consumption of the output. Individuals react to negative externalities by increasing their labour supply in order to produce substitutes for the diminishing resource. The increase in production and consumption that ensues generates further deterioration of the future quality or quantity of the free resource, thus giving rise to a self-reinforcing process. Multiple equilibria and critical mass effects are consistent with the functioning of this economy and the resulting level of aggregate production may be higher than is socially desirable.

Date: 2004
References: Add references at CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://journals.cambridge.org/abstract_S1355770X04001524 link to article abstract page (text/html)

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: http://EconPapers.repec.org/RePEc:cup:endeec:v:9:y:2004:i:05:p:591-612_00

Access Statistics for this article

More articles in Environment and Development Economics from Cambridge University Press
Address: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Series data maintained by Duncan Rule ().