Conservation: From Voluntary Restraint to a Voluntary Price Premium / Matthew Kotchen, Michael Moore.

Format:

Book

Author/Creator:

Kotchen, Matthew.

Contributor:

National Bureau of Economic Research.

Moore, Michael.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13678.

NBER working paper series no. w13678

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Conservation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

This paper investigates how concern for the environment translates into predictable patterns of consumer behavior. Two types of behavior are considered. First, individuals who care about environmental quality may voluntarily restrain their consumption of goods and services that generate a negative externality. Second, individuals may choose to pay a price premium for goods and services that are more environmentally benign. A theoretical model identifies a symmetry between such voluntary restraint and a voluntary price premium that mirrors the symmetry between environmental policies based on either quantities (quotas) or prices (taxes). We test predictions of the model in an empirical study of household electricity consumption with introduction of a price-premium, green-electricity program. We find evidence of voluntary restraint and its relation to a voluntary price premium. The empirical results are consistent with the theoretical model of voluntary conservation.

Notes:

Print version record

December 2007.