Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/219994
Authors: 
Löschel, Andreas
Price, Michael
Razzolini, Laura
Werthschulte, Madeline
Year of Publication: 
2020
Series/Report no.: 
CAWM Discussion Paper No. 117
Abstract: 
This study explores whether negative income shocks from the COVID-19 pandemic affect the demand for environmental policy. By running a survey in Germany in May 2020, we show that there is a large and negative correlation between the COVID-19 income shocks and the willingness to support green policies. Importantly, this relation is separate from the effect of long-run income. Building on this first evidence, our study provides directions for future valuation studies. Specifically, our results provide a proof of concept that welfare analyses based on willingness-to-pay estimates to assess the benefit of an environmental good or the cost of an environmental damage may be downward biased if temporary changes in income are not considered.
Subjects: 
COVID-19
Environmental policy
Income shock
Welfare analysis
Willingness topay
JEL: 
Q51
Q58
D61
Document Type: 
Working Paper

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