Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods

33 Pages Posted: 21 Jan 2009

See all articles by Alistair Munro

Alistair Munro

National Graduate Institute for Policy Studies (GRIPS); University of London, Royal Holloway College - Department of Economics

Marieta Valente

University of Minho - Department of Economics

Date Written: January 20, 2009

Abstract

An impure public good is a commodity that combines public and private characteristics in fixed proportions. Green goods such as dolphin-friendly tuna or green electricity programmes provide increasingly popular examples of impure public goods. We design an experiment to test how the presence of impure public goods affects pro-social behaviour. We set parameters, such that from a theoretical point of view the presence of the impure public good is behaviourally irrelevant. In a baseline setting, where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour, defined as total contributions to the public good, is lower in the presence of the impure good. Some individuals do not alter their decisions, but roughly two fifths of subjects make a lower contribution to the public good in the presence of the impure public good. On the contrary, in the case where the impure public good favours the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We conclude that the presence of green goods which have only a small environmental component may reduce pro-environmental behaviour.

Keywords: green goods, impure public goods, pro-social behaviour, social norms, experimental economics

JEL Classification: C91, D64, H41, Q59

Suggested Citation

Munro, Alistair and Valente, Marieta, Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods (January 20, 2009). Available at SSRN: https://ssrn.com/abstract=1330327 or http://dx.doi.org/10.2139/ssrn.1330327

Alistair Munro

National Graduate Institute for Policy Studies (GRIPS) ( email )

Tokyo
Japan

HOME PAGE: http://www.grips.ac.jp/

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

Marieta Valente (Contact Author)

University of Minho - Department of Economics ( email )

Braga 4710-057
Portugal

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