On Income Inequality and Green Preferences

Renström, Thomas I and Laura Marsiliani

No 3677, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We derive conditions of individual preferences and technology that give rise to a negative correlation between income inequality and environmental protection. We present a class of models (which captures a static model as well as an overlapping-generations model) in which individuals differ in earning abilities, and where a representative takes the decisions on a pollution tax and a redistributive tax. We show that, if private consumption goods and the environment are non-inferior goods, and the decisive individual has lower ability than the average, they will prefer a higher redistributive tax and a lower pollution tax.

Keywords: Environmental policy; Redistribution; Inequality; Political economy (search for similar items in EconPapers)
JEL-codes: D63 D72 H21 H23 (search for similar items in EconPapers)
Date: 2003-01
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (2)

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