Arbeitspapier
Environmental Damage and Price Taking Behaviour by Firms and Consumers
Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic models through appropriate price distortions related to such coefficients. For the consumer, Slutsky's equations are derived. The different speeds of equilibrium adjustment in economic and climate models is reconciled in the Recursive Equilibrium with Environmental Damages (REED). An exchange economy and Robinson Crusoe economy illustrate our approach.
- Language
-
Englisch
- Bibliographic citation
-
Series: Tinbergen Institute Discussion Paper ; No. 09-029/1
- Classification
-
Wirtschaft
Energy: Demand and Supply; Prices
Valuation of Environmental Effects
Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
Consumer Economics: Theory
Consumer Economics: Empirical Analysis
Exchange and Production Economies
- Subject
-
environmental damage
substitution effects
income effects
Slutky's equations
equilibrium
Umweltbelastung
Mikroökonomik
Substitutionseffekt
Einkommenseffekt
Klimaschutz
Gleichgewichtstheorie
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Houba, Harold
Kremers, Hans
- Event
-
Veröffentlichung
- (who)
-
Tinbergen Institute
- (where)
-
Amsterdam and Rotterdam
- (when)
-
2009
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Houba, Harold
- Kremers, Hans
- Tinbergen Institute
Time of origin
- 2009
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