Are green consumers really green? Exploring the factors behind the actual consumption of organic food products

The increasing interest in sustainable consumption has lead several scholars to investigate the determinants that drive the consumption of organic food. Most of this research is based on consumers' self‐reports of their purchasing behavior by exploring declared behavioral intentions. There is a lack of understanding concerning the determinants of organic food consumption based on actual purchasing behavior. To fill this gap, this study is based on a combination of actual purchasing data and self‐reported data from a sample of 79 Italian consumers. The determinants of organic food consumption are explored by analyzing the effects of subjective norms, attitude, perceived behavioral control, intention to buy, organic knowledge, and health consciousness on actual purchasing behavior. Our results suggest that actual purchasing behavior is positively influenced by intention to buy and negatively by subjective norms. Although attitude towards buying organics is positively affected by health consciousness and perceived behavioral control, consumer knowledge about organics is found to influence purchase intentions. Theoretical and managerial implications, along with avenues for future research, are discussed.     

TOWARDS AN ECONOMICS OF AWARDS

Awards are a widespread phenomenon. They cater to the fundamental desire for social recognition and serve as a valuable incentive to influence behaviour. The study of awards such as medals, prizes and titles has in recent years gained momentum in economics, complementing the longstanding focus on material incentives. To evaluate the effectiveness of awards as a motivator is difficult as the effect of awards must be separated from the fact that awards are meant to be given to the best. We show how research on awards has advanced over the last couple of years, thus providing points of departure for future work.     

Trust breeds trust: How taxpayers are treated

Tax compliance has been studied in economics by analysing the individual decision of a representative person between paying and evading taxes. A neglected aspect of tax compliance is the interaction of taxpayers and tax authorities. The relationship between the two actors can be understood as an implicit or “psychological” contract. Studies on tax evasion in Switzerland show that the more strongly the political participation rights are developed, the more important this contract is, and the higher tax morale is. In this paper, empirical evidence based on a survey of tax authorities of the 26 Swiss states (cantons) is presented, indicating that the differences in the treatment of taxpayers by tax authorities can be explained by differences in political participation rights as well. Received: June 2000 / accepted: November 2000     

Stress that Doesn't Pay: The Commuting Paradox*

People spend a lot of time commuting and often find it a burden. According to standard economics, the burden of commuting is chosen when compensated either on the labor or on the housing market so that individuals' utility is equalized. However, in a direct test of this strong notion of equilibrium with panel data, we find that people with longer commuting time report systematically lower subjective well‐being. This result is robust with regard to a number of alternative explanations. We mention several possibilities of an extended model of human behavior able to explain this “commuting paradox”.     

THE HIDDEN ECONOMY: STATE AND PROSPECTS FOR MEASUREMENT1

To know the size and development of the hidden or underground economy is important for policy making, mainly because the measures undertaken may be misdirected if they are based on biased official statistics. The hidden economy can be measured by considering indicators. The direct methods are based on voluntary surveys and on tax auditing and other compliance methods. The indirect estimation methods rely on the identification of residuals with respect to income and expenditures, as well as in the labor and money markets. The strengths and weaknesses of each of these measurement approaches are discussed and the resulting estimates of the size of the hidden economy are compared. A different approach to measurement is to look at the determinants leading to the existence and growth of the hidden economy. Finally, the method of “unobserved variables” allows the combination of the two approaches by simultaneously considering the determinants and indicators of the under- ground economy. The results show a considerable range of sizes for a given country and year. Though there is a broad range of size estimates, there is general agreement that the hidden economy's size has been growing for all countries over recent decades. Further progress in quantitative knowledge about the hidden economy requires the development of a theoretical model which analyses the interdependencies between the official private sector, the hidden economy, and the public sector.     

Consensus,dissension and ideology among economists in various European countries and in the United States

The paper analyzes consensus and dissension among economists on the basis of surveys conducted in Belgium, France, Germany, Switzerland and the United States. The outcome of the analysis is that there exists a considerable amount of consensus, but substantial differences across countries. In Europe, and especially in Belgium and France, the views of ‘left’ and ‘right’ economists differ, these differences are strong, as expected, on propositions which have a clear ideological content. However, it also appears that economists are not always willing to distinguish ‘technical’ and ‘political’ aspects of an economic issue.     

Morality and Rationality in Environmental Policy

The "Moralist" camp takes environmental morale to be essential in order to save nature. The "Rationalist" camp, mainly represented by economists, takes market-based instruments solely relying on extrinsic motivation to be both necessary and sufficient for a successful environmental policy. Recently, the moralists have learned to appreciate economists' incentive instruments, and rationalists have learned that environmental morale is required to find political support for the introduction of their preferred instruments.Intrinsic motivation in the form of environmental morale is moreover closely connected to the extrinsic motivation via crowding effects. Economic incentives – in particular tradeable emission rights and emission taxes – tend to undermine environmental morale while policy instruments tend to raise it.An environmental policy based on complementarity is able to exploit the advantages, and to weaken the disadvantages, of the policies proposed by the two camps. Market-based instruments should be accompanied by policies informing and inviting the consumers to engage. In addition, possibilities to participate in the decision-making about environmental policy should be offered (preferably via direct democracy), and the policy should be decided and undertaken at the lowest possible level, normally the local community level.     

Maximising Happiness?

The measurement of individual happiness challenges the notion that revealed preferences only reliably and empirically reflect individual utility. Reported subjective well-being is a broader concept than traditional decision utility; it also includes concepts like experience and procedural utility. Micro- and macroeconometric happiness functions offer new insights on determinants of life satisfaction. However, one should not leap to the conclusion that happiness should be maximized, as was suggested for social welfare function maximization. In contrast, happiness research strengthens the validity of an institutional approach, such as reflected in the theory of democratic economic policy.     

Risk Minimization with Incomplete Information in a Model for High‐Frequency Data

We study risk‐minimizing hedging‐strategies for derivatives in a model where the asset price follows a marked point process with stochastic jump‐intensity, which depends on some unobservable state‐variable process. This model reflects stylized facts that are typical for high frequency data. We assume that agents in our model are restricted to observing past asset prices. This poses some problems for the computation of risk‐minimizing hedging strategies as the current value of the state variable is unobservable for our agents. We overcome this difficulty by a two‐step procedure, which is based on a projection result of Schweizer and show that in our context the computation of risk‐minimizing strategies leads to a filtering problem that has received some attention in the nonlinear filtering literature.