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.