Conference Agenda

We explore the interplay between two key drivers of green consumption: individual concerns about the environment, and about their image (i.e., how their choices are perceived by others and themselves). We build a microeconomic model analyzing the choices between lifestyles differing in cleanliness (brown/green) and conspicuousness (ostentatious/discrete). We assume one may consume green goods both for environmental and/or image motives, the main objective of the two differing between consumers, as captured by heterogeneous preference parameters. We highlight the role of image concerns as a substitute for environmental concerns in a range of preferences. Socioeconomic factors (such as lower green prices) and - to a much greater extent - cultural conditions (i.e., the distribution of preferences in the population) may allow for cleaner choices. In particular, taxes can spur lifestyle changes, albeit in a small range of preferences. Although conspicuous conservation can green individual baskets (reconciling Eco and Ego), it does not always yield environmental benefits at the collective level. We finally show the need to adapt policy tools to the preferences of the targeted group of consumers (e.g., complementing Pigovian taxes with nudges and income redistribution). While carbon taxes are efficient for those who do not care about the environment, redistribution from the wealthiest to the poorest may be more relevant beyond a minimum threshold of environmental concern.