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Endogenous Future Preferences and Conservation

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  • Maria Cunha-E-Sá
  • Clara Costa-Duarte

Abstract

A dynamic optimization model is developed in whichuncertainty about future preferences is endogenous,namely depending on the state of the environment atthe time the change in preferences occurs.Endogeneizing preferences not only provides economicintuition to previous results but also implies thatoptimal policies are less conservative. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Maria Cunha-E-Sá & Clara Costa-Duarte, 2000. "Endogenous Future Preferences and Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 253-262, June.
    • Handle: RePEc:kap:enreec:v:16:y:2000:i:2:p:253-262
    DOI: 10.1023/A:1008361604063
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    References listed on IDEAS

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    1. Kip Viscusi, W., 1988. "Irreversible environmental investments with uncertain benefit levels," Journal of Environmental Economics and Management, Elsevier, vol. 15(2), pages 147-157, June.
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    3. Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 4, pages 76-84, Palgrave Macmillan.
    4. Chichilnisky, Graciela & Beltratti, Andrea & Heal, Geoffrey, 1998. "Uncertain future preferences and conservation," MPRA Paper 7912, University Library of Munich, Germany.
    5. Heal, Geoffrey M., 1993. "The optimal use of exhaustible resources," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 18, pages 855-880, Elsevier.
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    7. repec:bla:scandj:v:92:y:1990:i:3:p:399-414 is not listed on IDEAS
    8. Fisher, Anthony C. & Hanemann, W. Michael, 1987. "Quasi-option value: Some misconceptions dispelled," Journal of Environmental Economics and Management, Elsevier, vol. 14(2), pages 183-190, June.
    9. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-1012, December.
    10. Ulph, A. & Ulph, D., 1994. "Global warming: why irreversibility may not require lower current emissions of greenhouse gases," Discussion Paper Series In Economics And Econometrics 9402, Economics Division, School of Social Sciences, University of Southampton.
    11. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 3-28.
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    Cited by:

    1. Svenja Hector, 2013. "Accounting for Different Uncertainties: Implications for Climate Investments?," Working Papers 2013.107, Fondazione Eni Enrico Mattei.
    2. Alain Ayong Le Kama, 2001. "Preservation and exogenous uncertain future preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 18(3), pages 745-752.
    3. Svenja Hector(), "undated". "Accounting for Different Uncertainties: Implications for Climate Investments?," Working Papers ETH-RC-13-007, ETH Zurich, Chair of Systems Design.

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