[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/drm/wpaper/2021-9.html
   My bibliography  Save this paper

Green consumption: The impact of trust and pessimism

Author

Listed:
  • Maria José Montoya Villalobos
Abstract
This paper proposes a green consumption model under uncertainty, where we consider green goods as impure public goods and analyze the comparative statics of green consumption. We consider that the environmental efficacity of green goods is uncertain, and we model uncertainty with risk perceptions, specifically with trust (defined as a belief about the veracity of the available information) and pessimism/optimism (which represents the consumer's probability estimation of the realization of the worst possible outcome when consuming green goods). We study their respective impact on green consumption and consider individuals with heterogeneous beliefs. Pessimism has a negative impact on green demand; meanwhile, an increase in trust does not always imply an increase in green demand. We determine the impact of uncertainty on the equilibrium and the socially optimal level of private voluntary provision and show that green consumption decreases with pessimism at the equilibrium. Meanwhile, at the optimum, an increase in pessimism willdecrease the individual's contributions for both the pessimist and optimist consumers. Moreover, we also fi nd that the sub-optimality of the Nash equilibrium, in the presence of an impure public good, is not straightforward under uncertainty.

Suggested Citation

  • Maria José Montoya Villalobos, 2021. "Green consumption: The impact of trust and pessimism," EconomiX Working Papers 2021-9, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2021-9
    as

    Download full text from publisher

    File URL: https://www.economix.fr/pdf/dt/2021/WP_EcoX_2021-9.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nyborg, Karine & Howarth, Richard B. & Brekke, Kjell Arne, 2006. "Green consumers and public policy: On socially contingent moral motivation," Resource and Energy Economics, Elsevier, vol. 28(4), pages 351-366, November.
    2. Wichman, Casey J., 2016. "Incentives, green preferences, and private provision of impure public goods," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 208-220.
    3. Welsch, Heinz & Kühling, Jan, 2009. "Determinants of pro-environmental consumption: The role of reference groups and routine behavior," Ecological Economics, Elsevier, vol. 69(1), pages 166-176, November.
    4. Engelmann, Dirk & Munro, Alistair & Valente, Marieta, 2017. "On the behavioural relevance of optional and mandatory impure public goods," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 134-144.
    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    6. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July.
    7. Chateauneuf, Alain & Eichberger, Jurgen & Grant, Simon, 2007. "Choice under uncertainty with the best and worst in mind: Neo-additive capacities," Journal of Economic Theory, Elsevier, vol. 137(1), pages 538-567, November.
    8. Alistair Munro & Marieta Valente, 2016. "Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 317-335, October.
    9. Tamai, Toshiki, 2018. "Dynamic provision of public goods under uncertainty," Economic Modelling, Elsevier, vol. 68(C), pages 409-415.
    10. Evangelia Sdrolia & Grigoris Zarotiadis, 2019. "A Comprehensive Review For Green Product Term: From Definition To Evaluation," Journal of Economic Surveys, Wiley Blackwell, vol. 33(1), pages 150-178, February.
    11. Kotchen, Matthew J., 2005. "Impure public goods and the comparative statics of environmentally friendly consumption," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 281-300, March.
    12. Joshi, Yatish & Rahman, Zillur, 2019. "Consumers' Sustainable Purchase Behaviour: Modeling the Impact of Psychological Factors," Ecological Economics, Elsevier, vol. 159(C), pages 235-243.
    13. Brouhle, Keith & Khanna, Madhu, 2012. "Determinants of participation versus consumption in the Nordic Swan eco-labeled market," Ecological Economics, Elsevier, vol. 73(C), pages 142-151.
    14. Johanna Etner & Meglena Jeleva & Pierre‐Andre Jouvet, 2009. "Pessimism Or Optimism: A Justification To Voluntary Contributions Toward Environmental Quality," Australian Economic Papers, Wiley Blackwell, vol. 48(4), pages 308-319, December.
    15. Vermeir, Iris & Verbeke, Wim, 2008. "Sustainable food consumption among young adults in Belgium: Theory of planned behaviour and the role of confidence and values," Ecological Economics, Elsevier, vol. 64(3), pages 542-553, January.
    16. Brécard, Dorothée & Hlaimi, Boubaker & Lucas, Sterenn & Perraudeau, Yves & Salladarré, Frédéric, 2009. "Determinants of demand for green products: An application to eco-label demand for fish in Europe," Ecological Economics, Elsevier, vol. 69(1), pages 115-125, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Montoya-Villalobos, Maria J., 2023. "Green consumption: The role of confidence and pessimism," Ecological Economics, Elsevier, vol. 205(C).
    2. Qinxin Guo & Enci Wang & Yongyou Nie & Junyi Shen, 2021. "Revisiting the impact of impure public goods on consumers’ prosocial behavior: A lab experiment in Shanghai," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 51-66, January.
    3. Lucas, Sterenn & Salladarré, Frédéric & Brécard, Dorothée, 2018. "Green consumption and peer effects: Does it work for seafood products?," Food Policy, Elsevier, vol. 76(C), pages 44-55.
    4. Brumme, Anja, 2019. "Introducing a "green" good: Implications for environmental quality and social welfare," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203655, Verein für Socialpolitik / German Economic Association.
    5. Alistair Munro & Marieta Valente, 2016. "Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 317-335, October.
    6. Lanz, Bruno & Wurlod, Jules-Daniel & Panzone, Luca & Swanson, Timothy, 2018. "The behavioral effect of Pigovian regulation: Evidence from a field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 190-205.
    7. Arnab Mitra & Michael R. Moore, 2018. "Green Electricity Markets as Mechanisms of Public-Goods Provision: Theory and Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 45-71, September.
    8. Mewton, Ross T. & Cacho, Oscar J., 2011. "Green Power voluntary purchases: Price elasticity and policy analysis," Energy Policy, Elsevier, vol. 39(1), pages 377-385, January.
    9. Janine Fleith Medeiros & Gabriel Vidor & José Luís Duarte Ribeiro, 2018. "Driving Factors for the Success of the Green Innovation Market: A Relationship System Proposal," Journal of Business Ethics, Springer, vol. 147(2), pages 327-341, January.
    10. Anil Markandya & Dirk T.G. Rübbelke, 2012. "Impure public technologies and environmental policy," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 39(2), pages 128-143, May.
    11. Wintschnig, Bea Alexandra, 2021. "The Attitude-Behavior Gap – Drivers and Barriers of Sustainable Consumption," Junior Management Science (JUMS), Junior Management Science e. V., vol. 6(2), pages 324-346.
    12. Nathalie Lazaric & Fabrice Guel & Jean Belin & Vanessa Oltra & Sébastien Lavaud & Ali Douai, 2020. "Determinants of sustainable consumption in France: the importance of social influence and environmental values," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1337-1366, November.
    13. Dorner, Zack, 2019. "A behavioral rebound effect," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    14. Richard Cornes, 2016. "Aggregative Environmental Games," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 339-365, February.
    15. Kautish, Pradeep & Paço, Arminda & Thaichon, Park, 2022. "Sustainable consumption and plastic packaging: Relationships among product involvement, perceived marketplace influence and choice behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    16. Dirk Engelmann & Alistair Munro & Marieta Valente, 2011. "On the behavioural relevance of optional and mandatory impure public goods: results from a laboratory experiment," NIMA Working Papers 45, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    17. Freundt, Jana & Lange, Andreas, 2021. "On the voluntary provision of public goods under risk," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).
    18. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    19. Massimiliano Mazzanti & Valeria Costantini & Susanna Mancinelli & Massimilano Corradini, 2011. "Environmental and Innovation Performance in a Dynamic Impure Public Good Framework," Working Papers 201117, University of Ferrara, Department of Economics.
    20. Cecere, Grazia & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Waste prevention and social preferences: the role of intrinsic and extrinsic motivations," Ecological Economics, Elsevier, vol. 107(C), pages 163-176.

    More about this item

    Keywords

    Green consumption; trust; pessimism; uncertainty; impure public goods.;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2021-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerie Mignon (email available below). General contact details of provider: https://edirc.repec.org/data/modemfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.