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Environmental preferences and consumer behavior

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  • Wagner, Katherine

Abstract

This paper demonstrates that environment-conscious consumers have lower gasoline retail (tax-exclusive) price and excise tax elasticities, suggesting that they are less sensitive to changes in prices and taxes than their less environmental counterparts. These results on an American state-year dataset are robust to the use of two environmental proxies and to the instrumentation of gasoline retail prices. These findings support the existence of heterogeneous environmental preferences by demonstrating that certain consumers incorporate environmental ideology into their utility functions distinctly from income considerations. The implication that environmental preferences contribute to differential responsiveness to pecuniary signals has repercussions for the forecasting of consumer behavior and for the ease of implementation of environmental policy.

Suggested Citation

  • Wagner, Katherine, 2016. "Environmental preferences and consumer behavior," Economics Letters, Elsevier, vol. 149(C), pages 1-4.
  • Handle: RePEc:eee:ecolet:v:149:y:2016:i:c:p:1-4
    DOI: 10.1016/j.econlet.2016.09.028
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    References listed on IDEAS

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    1. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
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    Cited by:

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    2. Shuiwang Zhang & Qianlan Ding & Jingcheng Ding, 2023. "Return Strategy of E-Commerce Platform Based on Green and Sustainable Development," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
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    4. Zhang, Wenjie & He, Lingling & Yuan, Hongping, 2022. "Enterprises’ decisions on adopting low-carbon technology by considering consumer perception disparity," Technovation, Elsevier, vol. 117(C).
    5. Xu, Haitao & Pan, Xiongfeng & Guo, Shucen & Lu, Yuduo, 2021. "Forecasting Chinese CO2 emission using a non-linear multi-agent intertemporal optimization model and scenario analysis," Energy, Elsevier, vol. 228(C).

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    More about this item

    Keywords

    Environment; Preferences; Taxation; Elasticity;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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