| Title | Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? |
|---|---|
| ID_Doc | 32423 |
| Authors | Aghion, P; Benabou, R; Martin, R; Roulet, A |
| Title | Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? |
| Year | 2023 |
| Published | American Economic Review-Insights, 5, 1 |
| Abstract | We investigate the effects of consumers' environmental con-cerns and market competition on firms' decisions to innovate in "clean" technologies. Agents care about their consumption and environmental footprint; firms pursue greener products to soften price competition. Acting as complements, these forces deter-mine R&D, pollution, and welfare. We test the theory using panel data on patents by 7,060 automobile sector firms in 25 coun-tries, environmental willingness to pay, and competition. As pre-dicted, exposure to prosocial attitudes fosters clean innovation, all the more so where competition is strong. Plausible increases in both together can spur it as much as a large fuel price increase. (JEL D22, L62, O31, O34, Q52, Q53, Q54) |
| http://cep.lse.ac.uk/pubs/download/dp1684.pdf |
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