Public Goods Provision in the Presence of Heterogeneous Green Preferences

43 Pages Posted: 30 Jun 2014 Last revised: 18 May 2022

See all articles by Mark R. Jacobsen

Mark R. Jacobsen

University of California, San Diego (UCSD) - Department of Economics; Stanford University

Jacob S. LaRiviere

University of Tennessee, Chattanooga

Michael Price

Georgia State University - Department of Economics

Date Written: June 2014

Abstract

We develop a model of the private provision of public goods in a world where agents face convex costs of provision. Consonant with prior empirical evidence, we introduce preference heterogeneity by allowing a subset of agents to exhibit pro-social behavior that reflects "green" preferences. We use the model to compare different policies to promote private provision of public goods such as environmental quality or energy conservation. Counter to the standard result, we find that technology standards are frequently preferred to price-based instruments. Extending the model to allow for both benefit and cost heterogeneity, we find that policy choice depends on the correlation between the two forms of heterogeneity.

Suggested Citation

Jacobsen, Mark R. and LaRiviere, Jacob S. and Price, Michael, Public Goods Provision in the Presence of Heterogeneous Green Preferences (June 2014). NBER Working Paper No. w20266, Available at SSRN: https://ssrn.com/abstract=2460605

Mark R. Jacobsen (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

Stanford University ( email )

Stanford, CA 94305
United States

Jacob S. LaRiviere

University of Tennessee, Chattanooga ( email )

Department of Philosophy & Religion (#2753)
Chattanooga, TN 37403-2598
United States

Michael Price

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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