Green Transition with Dynamic Social Preferences
Fuente:
arXiv
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| Hauptverfasser: | , |
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| Format: | Preprint |
| Veröffentlicht: |
2025
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| _version_ | 1866915406225080320 |
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| author | Borissov, Kirill Hashimzade, Nigar |
| author_facet | Borissov, Kirill Hashimzade, Nigar |
| contents | We examine a green transition policy involving a tax on brown goods in an economy where preferences for green consumption consist of a constant intrinsic individual component and an evolving social component. We analyse equilibrium dynamics when social preferences exert a positive externality in green consumption, creating complementarity between policy and preferences. The results show that accounting for this externality allows for a lower tax rate compared to policy ignoring the social norm effects. Furthermore, stability conditions permit gradual tax reductions or even removal along the transition path, minimising welfare losses. Thus, incorporating policy-preference interactions improves green transition policy design. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2507_17415 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Green Transition with Dynamic Social Preferences Borissov, Kirill Hashimzade, Nigar Theoretical Economics 91B76 (Primary) 91B55 (Secondary) We examine a green transition policy involving a tax on brown goods in an economy where preferences for green consumption consist of a constant intrinsic individual component and an evolving social component. We analyse equilibrium dynamics when social preferences exert a positive externality in green consumption, creating complementarity between policy and preferences. The results show that accounting for this externality allows for a lower tax rate compared to policy ignoring the social norm effects. Furthermore, stability conditions permit gradual tax reductions or even removal along the transition path, minimising welfare losses. Thus, incorporating policy-preference interactions improves green transition policy design. |
| title | Green Transition with Dynamic Social Preferences |
| topic | Theoretical Economics 91B76 (Primary) 91B55 (Secondary) |
| url | https://arxiv.org/abs/2507.17415 |