Is the income elasticity of environmental improvements less than one?

Kriström, Bengt; Riera, Pere

doi:10.1007/bf00420426

Cited by 251 publications

(141 citation statements)

References 3 publications

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“…This distinction is carried through the literature by Kaufmann et al (1998), Torras and Boyce (1998) and Galeotti (2005) among others. 10 Also proposed was that if environmental amenity is a luxury good, then a rise in income will result in a higher demand for a clean environment through pressure for policy change, known as the income or luxury good effect (Grossman and Krueger, 1991;Kristrom and Riera, 1996).…”

Section: The Jevons Controversymentioning

confidence: 99%

The Remarkable Environmental Rebound Effect of Electric Cars: A Microeconomic Approach

Vivanco

Freire‐González

Kemp

et al. 2014

Environ. Sci. Technol.

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The main objective of the thesis is to seek insights into the theory, and provide empirical evidence of rebound effects. Rebound effects reduce the environmental benefits of environmental policies and household behaviour changes. In particular, win-win demand side measures, in the form of energy efficiency and household consumption pattern changes, are seen as ways for households and businesses to save money and the environment. However, these savings have environmental impacts when spent, which are known as rebound effects. This is an area that has been widely neglected by policy makers.This work extends the rebound effect literature in three important ways, (1) it incorporates the potential for variation of rebound effects with household income level, (2) it enables the isolation of direct and indirect effects for cases of energy efficient technology adoption, and examines the relationship between these two component effects, and (3) it expands the scope of rebound effect analysis to include government taxes and subsidies. MACROBUTTON HTMLDirectUsing a case study approach it is found that the rebound effect from household consumption pattern changes targeted at electricity is between 5 and 10%. For consumption pattern changes with reduced vehicle fuel use, the rebound effect is in the order of 20 to 30%. Higher income households in general are found to have a lower total rebound effect; however the indirect effect becomes relatively more significant at higher household income levels. In the win-lose case of domestic photovoltaic electricity generation, it is demonstrated that negative rebound effects can occur, which can potentially amplify the environmental benefits of this action.The rebound effect from a carbon tax, which occurs due to the re-spending of raised revenues, was found to be in the range of 11-32%. Taxes and transfers between households of different income levels also have environmental implications. For example, a more progressive tax structure, with increased low income welfare payments is likely to increase greenhouse gas emissions. Subsidies aimed at encouraging environmentally friendly consumption habits are also subject to rebound effects, as they constitute a substitution of government expenditure for household expenditure. For policy makers, these findings point to the need to incorporate rebound effects in the environmental policy evaluation process.' KeywordsRebound effect, demand side management, direct rebound effect, indirect rebound effect, greenhouse gas emissions, CO 2 , household consumption patterns, efficiency, energy, conservation, natural resources. The energy and emissions produced at other stages of the production chain outside of the household scope. vi List of Tables and +/-is efficiency net effect minus the conservation net effect with negative values in parentheses). 66 Table 5.5: Rebound effects at mean and median total expenditure levels for separated fuel efficiency case (indirect reduction is the efficiency indirect rebound minus the conservation indir...

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Section: The Jevons Controversymentioning

confidence: 99%

The Remarkable Environmental Rebound Effect of Electric Cars: A Microeconomic Approach

Vivanco

Freire‐González

Kemp

et al. 2014

Environ. Sci. Technol.

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“…It has long been argued that environmental quality is a luxury good, with an income elasticity of demand greater than one (Kriström and Riera, 1996). If this is so, then demand for environmental goods, manifested either as consumers buying greener products, or demanding tougher environmental legislation, will grow disproportionately quickly as incomes rise.…”

Section: Determinants Of the Demand For Environmental Qualitymentioning

confidence: 99%

Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?

Jacobsen

Hanley

2008

Environ Resource Econ

182

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This paper is concerned with the empirical relationship between biodiversity conservation values and income. We use random effects panel models to examine the effects of income, and then GDP per capita, on willingness to pay for habitat and biodiversity conservation. In a meta-analysis, 145 Willingness To Pay estimates for biodiversity conservation where existence value plays a major role were collected from 46 contingent valuation studies across six continents. Other effects included in the meta-analysis were the study year; habitat type; continent; scope as presented to respondents; whether WTP bids were for preventing a deterioration or gaining an improvement in conservation, whether a specific species or specific habitat was protected; whether the questionnaire used a dichotomous choice or an open-ended format; distribution format; and the choice of payment vehicle. GDP per capita seemed to perform as well as an explanatory variable as respondent's mean stated income, indicating that it is wealth in society as a whole which determines variations in WTP. Our main conclusion is that the demand for biodiversity conservation rises with a nation's wealth, but the income elasticity of demand is less than one. JEL Codes: Q2, H4, D6

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“…In the general area of environmental valuation, most of the empirical evidence suggests that the income elasticity is less than one (Pearce, 1980;Kristrom and Riera, 1996;Hökby and Söderqvist 2001). In the area of travel choice analysis, a significant amount of research indicates a cross-sectional income elasticity of around 0.5 (Gunn, 2001;Wardman, 2001b).…”

Section: Variations In Valuationsmentioning

confidence: 99%

Traffic related noise and air quality valuations: evidence from stated preference residential choice models

Wardman

Bristow

2004

Transportation Research Part D: Transport and Environment

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This paper reports on research which has estimated valuations of changes in traffic related noise levels and air quality and which contributes to the body of knowledge and to methodology in this area. There are several novel aspects of this research. Firstly, there have been relatively few stated preference studies of the monetary valuations of traffic related noise and air quality. A feature of this analysis is the examination of variations in values according to the size and sign of the environmental change, the currently experienced level of the attribute and various socio-economic factors. Secondly, the important issue of presentation is addressed, with two different methods used in the valuation of air quality and links made between valuations and physical measures. Thirdly, the results from stated preference and the contingent valuation method are compared. Finally, we bring together evidence from other studies and compare them with the findings obtained here.

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Is the income elasticity of environmental improvements less than one?

Cited by 251 publications

References 3 publications

The Remarkable Environmental Rebound Effect of Electric Cars: A Microeconomic Approach

The Remarkable Environmental Rebound Effect of Electric Cars: A Microeconomic Approach

Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?

Traffic related noise and air quality valuations: evidence from stated preference residential choice models

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