Going Green for Esteem: An Extended Uzawa-Lucas Model with Status Driven Environmentalism

Sophie Lian Zhou

No 206560, Discussion Papers from University of Bonn, Institute for Food and Resource Economics

Abstract: Conspicuous conservation is a newly emerged phenomenon of status driven environmentalism, where individuals undertake publicly visible conservation activities for the purpose of gaining social esteem. This paper studies the role of conspicuous conservation as an additional means of regulating environmental issues in an extended Uzawa-Lucas model with leisure choice, environmental externality and social status. Particular attention is paid to the long-term impact of conspicuous conservation on environmental quality, production culture, and the overall welfare along the balanced growth path (BGP) in a decentralized economy. Conspicuous conservation is found to aid pollution taxation and always increase environmental quality by providing additional incentives for pollution abatement. It however also increases the dirtiness of the aggregate technology, and encourages the use of the polluting factor. The overall welfare impact is positive when pollution control is absent or weak, but eventually turns negative as pollution taxation becomes increasingly stringent. The numerical example further suggests that strong status comparison is generally undesirable except at zero or extremely low pollution control.

Keywords: Environmental Economics and Policy; Institutional and Behavioral Economics; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 41
Date: 2015-06-30
New Economics Papers: this item is included in nep-ene, nep-env, nep-pke and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubfred:206560

DOI: 10.22004/ag.econ.206560

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