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On Intertemporal Dependent Preferences with regard Environmental Goods and Services

Author

Listed:
  • José Manuel Madeira Belbute

    (Department of Economics, University of Évora)

  • Paulo Brito

    (Technical University of Lisbon ? Instituto Superior de Economia e Gestão)

Abstract
This note extends the standard theory of intertemporal consumer preferences with regard environmental goods and services. It proposes an intertemporal dependent preferences framework that generates a ?persistence effect? consistent with consumer?s environmental friendly behaviours. Given the present civilizational and cultural pattern of preferences, consumers need to endure a learning-by-consuming process to full enjoy (and use) them, in order to commit himself with ?green-economic behaviors". The contribution to the existing literature is two fold. First we consider the presence of habit-formation with regard the consumption of environmental goods and services in a two goods framework. Secondly, we establish a consistent preference structure that displays a bounded adjacent complementarity in the consumption of environmental goods and services and present the correspondent properties that need to bee fulfilled by the utility function.These extensions will allow new advances in environmental economics, especially in the complete characterization of the demand for environmental goods and services and for the sustainable growth debate.

Suggested Citation

  • José Manuel Madeira Belbute & Paulo Brito, 2006. "On Intertemporal Dependent Preferences with regard Environmental Goods and Services," Economics Working Papers 06_2006, University of Évora, Department of Economics (Portugal).
    • Handle: RePEc:evo:wpecon:06_2006
    as

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    File URL: http://hdl.handle.net/10174/8438
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    References listed on IDEAS

    as
    1. Jody Overland & Christopher D. Carroll & David N. Weil, 2000. "Saving and Growth with Habit Formation," American Economic Review, American Economic Association, vol. 90(3), pages 341-355, June.
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    5. Wan, Henry, 1970. "Optimal Saving Programs under Intertemporally Dependent Preferences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(3), pages 521-547, October.
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    More about this item

    Keywords

    Consumer behavior; intertemporal dependent preferences; environmental;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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