Green consumerism and pollution control

Chander, Parkash and Muthukrishnan, S. (2015) Green consumerism and pollution control. Journal of Economic Behavior and Organization, 114. pp. 27-35. ISSN 01672681

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In this paper, we show that collective action by environmentally aware/green consumers, who derive benefits from consuming environmentally cleaner products, can reduce pollution and improve social welfare in the same manner as pollution taxes or subsidies for reducing pollution can. We construct a model with two competing firms each producing a good of different environmental quality and two types of consumers with high and low preferences for environmental quality and characterize a benchmark equilibrium in which each consumer acts individually and disregards that his decision to buy a good may affect the level of pollution. We then show that, compared to the benchmark equilibrium, collective action by consumers with high preference who take into account the impact of their combined decision to buy a good on pollution will result in an equilibrium with not only lower pollution and higher social welfare, but also higher prices and profits for the firms.

Item Type: Article
Keywords: Collective action | Environmental quality | Environmentally aware | Green consumers | Pollution | Vertically differentiated duopoly
Subjects: Physical, Life and Health Sciences > Environmental Science, Policy and Law
JGU School/Centre: Jindal School of Government and Public Policy
Depositing User: Mr Sombir Dahiya
Date Deposited: 20 Jan 2022 06:42
Last Modified: 31 Jan 2023 11:15
Official URL:


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