Munich Personal RePEc Archive

A Note on Environment-dependent Time Preferences

Chu, Hsun and Lai, Ching-Chong and Liao, Chih-Hsing (2012): A Note on Environment-dependent Time Preferences. Forthcoming in:

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Abstract

In this paper we investigate the growth effect of environmental taxes when the time preference is endogenously determined by the environmental quality. We find that if people become more patient due to a cleaner environment, raising the environmental tax may reduce pollution and stimulate growth. Moreover, the Pigouvian principle may be inefficient in the presence of an endogenous time preference.

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