Behavioral Economics and Environmental Policy

Posted: 22 Sep 2012

See all articles by Fredrik Carlsson

Fredrik Carlsson

Goeteborg University - School of Economics & Commercial Law

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law

Date Written: August 2012

Abstract

This article provides an interpretive survey on implications of insights from behavioral economics for environmental policy. In particular, it discusses whether, and if so how, policy implications based on conventional economic theory have to be modified when insights from behavioral economics are considered. More specifically, it discusses concerns for cooperation, fairness, self-image, social approval, and status. Moreover, it addresses potential crowding-out effects, context-dependent and incoherent preferences, risk misperceptions, ambiguity aversion, and regulator bias. We conclude that behavioral economics has a lot to offer environmental economics and that some normative policy recommendations have to be modified. Yet the most fundamental policy recommendations in environmental economics generally prevail and are sometimes even reinforced through behavioral economics insights.

Suggested Citation

Carlsson, Fredrik and Johansson-Stenman, Olof, Behavioral Economics and Environmental Policy (August 2012). Annual Review of Resource Economics, Vol. 4, Issue 1, pp. 75-99, 2012, Available at SSRN: https://ssrn.com/abstract=2150004 or http://dx.doi.org/10.1146/annurev-resource-110811-114547

Fredrik Carlsson (Contact Author)

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46 31-773 4174 (Phone)
+46 31-773 1043 (Fax)

Olof Johansson-Stenman

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46-31-773 25 38 (Phone)
+46-31-773 13 26 (Fax)

HOME PAGE: http://www.handels.gu.se/econ/EEU/johansso.htm

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
958
PlumX Metrics