Income inequality and willingness to pay for environmental public goods

Baumgärtner, Stefan, Drupp, Moritz A., Meya, Jasper N., Munz, Jan M. and Quaas, Martin (2017) Income inequality and willingness to pay for environmental public goods Journal of Environmental Economics and Management, 85 . pp. 35-61. DOI 10.1016/j.jeem.2017.04.005.

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We study how the distribution of income among members of society, and income inequality in particular, affects social willingness to pay (WTP) for environmental public goods. We find that social WTP for environmental goods decreases (increases) with income inequality if and only if environmental goods and manufactured goods are substitutes (complements). We derive adjustment factors for benefit transfer to control for differences in income distributions between a study site and a policy site. For illustration, we quantify how social WTP for environmental public goods depends on the respective income distributions for empirical case studies in Sweden and the World at large. We find that the adjustment for income inequality can be substantial.

Document Type: Article
Keywords: Environmental goods Public goods Income distribution Inequality Willingness to pay Benefit transfer Sustainability policy
Research affiliation: Kiel University > Kiel Marine Science
Kiel University
OceanRep > The Future Ocean - Cluster of Excellence
Refereed: Yes
DOI etc.: 10.1016/j.jeem.2017.04.005
ISSN: 00950696
Date Deposited: 19 Dec 2017 14:50
Last Modified: 19 Dec 2017 14:50

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