Homo Economicus and Homo Politicus: Interpretation and Aggregation of Environmental Values

Abstract:     
In addition to his role as a consumer pursuing his own interests, an individual may also regard himself as an ethical observer or citizen, judging matters from society's point of view. However, an individual's personal preferences do not necessarily coincide with his social preferences. This paper presents a formal model in which individuals are assumed to have two distinct preference orderings: Personal well-being functions are applied in contexts where the individual regards himself as a consumer, while subjective social welfare functions are used when the citizen role is perceived as most relevant. The paper discusses the implications for environmental valuation if some respondents take on a citizen role when reporting their willingness to pay.

Keywords: environmental valuation, social welfare judgments, multiple preference orderings

JEL Classification: D11, D61, H41, Q21

Accepted Paper Series