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dc.contributor.authorDavis, Leilaen_US
dc.contributor.authorSkott, Peteren_US
dc.description.abstractThe economic analysis of global warming is dominated by models based on optimal growth theory. This approach can generate biases in the presence of positional goods and status effects. We show that by ignoring these direct consumption externalities, integrated assessment models overestimate the social return to conventional investment and underestimate the optimal amount of investment in mitigation. Empirical evidence on the influence of relative consumption on utility suggests that the bias could be quantitatively significant. Our results from a simple survey support this conclusion.en_US
dc.publisherUniv. of Massachusetts, Dep. of Economics Amherst, Mass.en_US
dc.relation.ispartofseriesWorking Paper, University of Massachusetts, Department of Economics 2011-24en_US
dc.subject.keywordrepresentative agenten_US
dc.subject.keywordconsumption externalitiesen_US
dc.subject.keywordpositional goodsen_US
dc.subject.keywordrelative consumptionen_US
dc.subject.keywordglobal warmingen_US
dc.subject.keyworddiscount ratesen_US
dc.titlePositional goods, climate change and the social returns to investmenten_US
dc.typeWorking Paperen_US
Appears in Collections:Working Papers, Department of Economics, University of Massachusetts

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