The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries

This paper empirically estimates a micro-founded model which studies the macroeconomic impact of environmental and financial risks on consumption choices in the Mediterranean Region. The analysis is carried out using time series aggregate data for fourteen Mediterranean countries over the period 1965-2008. Our results indicate that both risks and their interaction significantly influence consumption dynamics. Our estimates of the indexes of relative risk aversion and relative prudence, as well as the relative preference for the quality of environment suggest marked cross-country heterogeneity.


Issue Date:
2014-04
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/172443
Total Pages:
25
JEL Codes:
Q50; D81; E21
Series Statement:
ERM
43.2014




 Record created 2017-04-01, last modified 2017-08-27

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