TY  - JOUR
AU  - Kotchen,Matthew
AU  - Moore,Michael
TI  - Conservation: From Voluntary Restraint to a Voluntary Price Premium
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13678
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13678
L1  - http://www.nber.org/papers/w13678.pdf
N1  - Author contact info:
Matthew Kotchen
School of Forestry & Environmental Studies,
School of Management,
and Department of Economics
Yale University
195 Prospect Street
New Haven, CT 06511
Tel: 203/432-9533
Fax: 203/436-9150
E-Mail: matthew.kotchen@yale.edu

Michael Moore
School of Natural Resources & Environment
University of Michigan
Ann Arbor, MI 48109-1041
E-Mail: micmoore@umich.edu
AB  - 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.
ER  -