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Environmental defensive expenditures and households behaviour in Italy

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  • Silvia Tiezzi

Abstract

The paper explores the role of Environmental Defensive Expenditures in the consumption behaviour of Italian households. Environmental Defensive Expenditures are not borne to increase households' welfare, but to prevent or avoid the effects of a worsening environmental quality. The literature on environmental accounting argues that economic growth in industrialized countries is accompanied by an increasing load of defensive activities that may lead to a reorientation of consumption behaviour. In this work this hypothesis is tested using annual data on mean consumption expenditures of Italian households from 1985 to 1996. A complete system of demand is estimated and short-run price elasticities of demand for Defensive Expenditures are calculated. The complete system of demand functions is specified using the Quadratic Almost Ideal Demand System proposed by Banks, Blundell and Lewbel. Results show that there is very low substitution between the demand for the six aggregate goods in which total expenditure is here divided and the Environmental Defensive Expenditures. Thus it seems that an increase in Environmental Defensive Expenditures, driven by a change in environmental quality, would not lead to a change in the consumption pattern, at least as far as Italian households are concerned.

Suggested Citation

  • Silvia Tiezzi, 2002. "Environmental defensive expenditures and households behaviour in Italy," Applied Economics, Taylor & Francis Journals, vol. 34(16), pages 2053-2061.
  • Handle: RePEc:taf:applec:v:34:y:2002:i:16:p:2053-2061
    DOI: 10.1080/00036840210126197
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    Citations

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    Cited by:

    1. Robin Winkler, 2015. "Feast or Famine: The Welfare Impact of Food Price Controls in Nazi Germany," Economics Series Working Papers Number 136, University of Oxford, Department of Economics.
    2. Francesco Silvestri & Stefano Ghinoi & Vincenzo Barone, 2013. "Nautical tourism, carrying capac ity and environmental externality in a protected Lagoon of Northern Adriatic Sea," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2013(3), pages 145-180.
    3. Arabatzis, Garyfallos & Klonaris, Stathis, 2009. "An analysis of Greek wood and wood product imports: Evidence from the linear quadratic aids," Forest Policy and Economics, Elsevier, vol. 11(4), pages 266-270, July.
    4. Sun, Chuanwang & Ouyang, Xiaoling, 2016. "Price and expenditure elasticities of residential energy demand during urbanization: An empirical analysis based on the household-level survey data in China," Energy Policy, Elsevier, vol. 88(C), pages 56-63.
    5. Robin Winkler, 2015. "Feast or Famine: The Welfare Impact of Food Price Controls in Nazi Germany," Oxford Economic and Social History Working Papers _136, University of Oxford, Department of Economics.
    6. Michael Fesseha Yohannes & Toshinobu Matsuda, 2016. "Weather Effects on Household Demand for Coffee and Tea in Japan," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 33-44, January.
    7. Neuwahl, Frederik & Löschel, Andreas & Mongelli, Ignazio & Delgado, Luis, 2008. "Employment impacts of EU biofuels policy: Combining bottom-up technology information and sectoral market simulations in an input-output framework," Ecological Economics, Elsevier, vol. 68(1-2), pages 447-460, December.
    8. Toshinobu Matsuda, 2007. "Linearizing the inverse quadratic almost ideal demand system," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 381-396.

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