Eerola, Essi and Huhtala, Anni (2005) Promoting demand for organic food under preference and income heterogeneity. Paper at: The future of rural Europe in the global agri-food system : the XIth international congress of European Association of Agricultural Economists EAAE, Copenhagen, Denmark, August 24-27, 2005.
We examine the design of policies for promoting the consumption of green products under preference and income heterogeneity using organic products as an example. Two instruments are considered: a price subsidy for the organic products and a tax on the conventional products. Under income disparity, consumers with high income always prefer a socially optimal subsidy to a socially optimal tax, while low-income consumers prefer a tax on conventional products. When environmental policy is determined by the median voter, the policies implemented tend to be stricter than socially optimal policies if income differences are large.
|EPrint Type:||Conference paper, poster, etc.|
|Type of presentation:||Paper|
|Keywords:||taxation, preference heterogeneity, income disparity|
|Subjects:||Food systems > Policy environments and social economy|
|Research affiliation:|| Finland > Univ. Helsinki|
Finland > MTT Agrifood Research
|Deposited By:||Koistinen, Riitta|
|Deposited On:||31 May 2006|
|Last Modified:||12 Apr 2010 07:33|
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