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

Authors

Donatella Baiardi, Department of Economics, Management and Statistics, University of Milano-Bicocca, Italy
Matteo Manera, Department of Economics, Management and Statistics, University of Milano-Bicocca and Fondazione Eni Enrico Mattei, Italy
Mario Menegatti, Department of Economics, University of Parma, ItalyFollow

Date of This Version

4-2014

Abstract

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.

Recommended Citation

Baiardi, Donatella; Manera, Matteo; and Menegatti, Mario, "The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries" (April 01, 2014). Fondazione Eni Enrico Mattei Working Papers. Paper 906.
https://services.bepress.com/feem/paper906