Can green consumerism replace environmental regulation? - a differentiated-products example

Abstract

This paper assumes that consumers are willing to pay an extra premium for a good if it has a low impact on the environment. We examine if a little dose of such idealistic behavior has a large impact on the market equilibrium, and to what extent it can replace the environmental regulation. The analysis is carried out in a model with product differentiation, where consumers differ in their preferences for product quality. Consumers' willingness to pay the environmental premium may be uniformly or non-uniformly distributed. Green consumerism will only be modestly influential in both cases, despite the fact that product differentiation leads to relaxed competition and increased profits, and thereby creates leverage. (C) 2003 Elsevier B.V. All rights reserved

Published in

Resource and Energy Economics
2004, volume: 26, number: 3, pages: 281-293
Publisher: ELSEVIER SCIENCE BV

SLU Authors

• Eriksson, Clas

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Environmental Sciences and Nature Conservation

Publication identifier

• DOI: https://doi.org/10.1016/j.reseneeco.2003.10.001

Permanent link to this page (URI)

https://res.slu.se/id/publ/2889