Friday, April 22, 2011

Elasticity of Morals, con.

. Friday, April 22, 2011

Tyler Cowen notes the decline in "green" brands. He suggests that the trend is over. But I think it's just another data point demonstrating the income elasticity of public morals. Note that the earlier posts at that link have a more detailed discussion. I'm sure people have written about this at length before, but my education hasn't covered it and people seem to not generally talk in those terms. But why not?

An alternative theory is that it's about partisanship, not income. For example, we know that anti-war demonstrators, who often couch their protests in moral terms, tend to stay home when their preferred candidate in office. Since most environmentalists are on the left, perhaps the face that Obama is in office has led some to be less willing to spend extra on green goods, which has then led to fewer green brands making it onto the market.

That may be part of it, but I don't think it's all of it. High income countries tend to promote all kinds of civic virtues that are not shared by lower income countries. High income regions within high income countries do too. Public virtue appears to be a normal good, to at least some extent: people want more of it as their incomes increase.

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Elasticity of Morals, con.
 
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