The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries

Donatella Baiardi, Matteo Manera () and Mario Menegatti
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Donatella Baiardi: Department of Economics, Management and Statistics, University of Milano-Bicocca, Italy

No 2014.43, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper empirically estimates a micro-founded model which studies the macroeconomic impact of environmental and financial risks on consumption choices in the Mediterranean Region. The analysis is carried out using time series aggregate data for fourteen Mediterranean countries over the period 1965-2008. Our results indicate that both risks and their interaction significantly influence consumption dynamics. Our estimates of the indexes of relative risk aversion and relative prudence, as well as the relative preference for the quality of environment suggest marked cross-country heterogeneity.

Keywords: Consumption; Environmental Risk; Financial Risk; Prudence; Relative Risk Aversion; Relative Preference for the Quality of Environment (search for similar items in EconPapers)
JEL-codes: D81 E21 Q50 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-env and nep-mac
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Related works:
Working Paper: The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries (2014)
Working Paper: The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2014.43

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