DP3677 On Income Inequality and Green Preferences
Author(s): | Laura Marsiliani, Thomas I Renström |
Publication Date: | January 2003 |
Keyword(s): | environmental policy, inequality, political economy, redistribution |
JEL(s): | D63, D72, H21, H23 |
Programme Areas: | Public Economics |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=3677 |
We derive conditions of individual preferences and technology that give rise to a negative correlation between income inequality and environmental protection. We present a class of models (which captures a static model as well as an overlapping-generations model) in which individuals differ in earning abilities, and where a representative takes the decisions on a pollution tax and a redistributive tax. We show that, if private consumption goods and the environment are non-inferior goods, and the decisive individual has lower ability than the average, they will prefer a higher redistributive tax and a lower pollution tax.