NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Conservation: From Voluntary Restraint to a Voluntary Price Premium

Matthew Kotchen, Michael Moore

NBER Working Paper No. 13678
Issued in December 2007
NBER Program(s):   EEE   PE

This paper investigates how concern for the environment translates into predictable patterns of consumer behavior. Two types of behavior are considered. First, individuals who care about environmental quality may voluntarily restrain their consumption of goods and services that generate a negative externality. Second, individuals may choose to pay a price premium for goods and services that are more environmentally benign. A theoretical model identifies a symmetry between such voluntary restraint and a voluntary price premium that mirrors the symmetry between environmental policies based on either quantities (quotas) or prices (taxes). We test predictions of the model in an empirical study of household electricity consumption with introduction of a price-premium, green-electricity program. We find evidence of voluntary restraint and its relation to a voluntary price premium. The empirical results are consistent with the theoretical model of voluntary conservation.

download in pdf format
   (223 K)

email paper

This paper is available as PDF (223 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13678

Published: Matthew Kotchen & Michael Moore, 2008. "Conservation: From Voluntary Restraint to a Voluntary Price Premium," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(2), pages 195-215, June. citation courtesy of

Users who downloaded this paper also downloaded these:
Holland and Moore w14254 When to Pollute, When to Abate? Intertemporal Permit Use in the Los Angeles NOx Market
Kotchen w13643 Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets
Reiss and White w9986 Demand and Pricing in Electricity Markets: Evidence from San Diego During California's Energy Crisis
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us