Positive Effect of Pollution Permits in a Variety Expansion Model with Social Status Preference

Yoshihiro Hamaguchi ()

Manchester School, 2019, vol. 87, issue 4, 591-606

Abstract: This study examines the effect of pollution permits on economic growth and welfare using a research and development‐based model that measures social status by a person's wealth position in society. Under realistic parameter conditions, we find that a decrease in pollution permit levels leads to an increase in the economic growth rate and improves welfare in a high steady state via the marginal rate of substitution between wealth and consumption, which is influenced by the crowding out and resource reallocation effects. This channel depends on the presence of social status preference, and we refer to this as the substitution effect.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1111/manc.12270

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:bla:manchs:v:87:y:2019:i:4:p:591-606

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is currently edited by Keith Blackburn

More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().