Sustainable Lifestyles: Microeconomic and Macroeconomic Models

A New Paradigm Integrate important theories from psychology into economics go beyond behavioural economics formalise theories View environmental policy from consumers’ perspectives

3www.glamurs.eu 1. Individual behaviour 2. Population behaviour 3. Behaviours and networks 4. Environmental policy Structure

Individual behaviour: 1 Maximize utility! preferences, consumption, activities (goods, energy, waste, transportation, time allocation) Constraints: income, technology, infrastructure, time Driving factors: dispositional (internal) and situational (external) factors

Individual behaviour: 2 1.reference point 2.social norms 3.environmental concern and altruism 4.self-identity, social identity & status, 5.cognition (habits, reference group bias and self-serving bias) 6.personal norms, values, attitudes 7.beliefs/expectations 8.discounting

Conflicts Among the Determinants of Environmental Behavior? 1.Habits dominate attitudes (short-distance car travel). 2.Income and price dominate technological progress (rebound-effect). 3.Infrastructure dominates attitudes (no public transport). Individual behaviour: 3

Population behaviour social interaction dynamics evolutionary game theory utility as fitness imitation learning by doing technical, societal and environmental tipping points path dependence

Behaviour and Networks spatial network social network local effects in network aggregate effects in networks uptake of green lifestyles diffusion of green lifestyle, spillovers

Environmental Policy monetary interventions, like taxes and subsidies environmental policy that lower infrastructural barriers to the adoption of innovative sustainable products information and education campaigns that move consumers decisions towards sustainable choices nudging, non-monetary interventions aimed at changing the decision frame towards sustainable choices

Questions 1.How important do you think are social norms compared to monetary incentives when it comes to the emergence of sustainable life-style? 2.Do you think that people understand the difference between environmental significant and insignificant behaviour? Are they aware of their environmental impact? 3.Which key factors/phenomena do you believe will influence the diffusion and adoption of sustainable life-styles?