Income Inequality and the Development of Environmental Technologies
By Francesco Vona, F. Patriarca. 2011
150 citations recorded by the source corpus.
Within rich countries, a large dispersion in the capacity of generating environmental innovations appears correlated to the level of inequality. Previous works analyze the relationship between inequality and environmental quality in a static setting. This paper builds a dynamic model more suitable to analyze technological externalities driven by the emergence of a new demand for green products. Under fairly general assumptions on technology and preferences, we show that: 1. the relationship between inequality and environmental innovation is highly non-linear and crucially depends on per-capita income; 2. an excessive inequality harms the development of environmental technologies especially in rich countries. Key to our results is the fact that externalities generated by pioneer consumers of green products benefit the entire population only for relatively low income distances. The empirical analysis robustly confirms our theoretical results, that is: whereas for rich countries inequality negatively affects the diffusion of innovations, per-capita income is paramount in poorer ones.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/01f932d79679721a0244f0b964e3401b76364900
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In Economics and Econometrics
Citations in the corpus
- Complexity and the Economics of Climate Change: A Survey and a Look Forward (2017, unknown): “One of the key parameters in Vona and Patriarca (2011) was the learning rate.”
- Lock-in and path dependence: an evolutionary approach to eco-innovations (2014, background): “Since Vona and Patriarca (2011) note that increased income inequality could reduce incentives to adopt eco-innovations, environmental policies should be coupled with social policies.”