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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may SUMMARYWe try to build a macroeconomic index, that includes some non-market variables, to be compared to the traditional GDP. Over the last twenty years answers to the welfare accounting problem have been different. Economists have used dynamic optimisation to rigorously derive an index that can be used to evaluate small projects and their contribution to well being. National Accountants are trying to extend the System of National Accounts (SNA) in the form of satellite accounts by increasing the system boundary. There is also a number of other studies which cannot be included in either of the previous categories and that we may call indices of welfare. They are not rigorously founded and start from common sense ideas of what should and what should not be considered as determinants of well being. This type of indices, however, has received wide attention thanks to their immediate comparability with GDP and to their characteristic of emphasising the long run trend of "welfare" as compared to GDP. Our work falls in the third category. We start from the Index of Sustainable Economic Welfare (ISEW) built up by Cobb and Daly in 1989 and we reproduce it for Italy, though revisiting the methodology associated to the construction of some of the variables. The results show that up to the seventies the Italian GDP only slightly overestimates the growth of economic welfare, but since then it seems to have been misleading, at least as compared to our index. While GDP has continued to rise, economic welfare has been stagnating. The importance of the environmental variables included seems to be decreasing over time going from the 38% in 1980 to the 31% in 1990. The cost of pollution (air, water and noise) has a greater weight in the sixties (about 13%) and falls to 8% in 1990. The ratio between GDP and environmental degradation has remained constant over the decades under consideration, thus contradicting the idea that the demand for environmental quality increases with income.Key words: Economic welfare; Environmental accounting; Sustainability. JEL: I31 NON TECHNICAL SUMMARYIn this paper we try to build a macroeconomic index of welfare to be compared to the traditional GDP. Over the last twenty years answers to the welfare accounting problem have been different. Economists have used dynamic optimisation to rigorously derive an index that can be used to evaluate small projects and their contribution to well being. National Acco...

This paper adopts a multi-commodity habit formation model to study whether unhealthy behaviors are related, i.e. whether there are contemporaneous and inter-temporal complementarities between alcohol and tobacco consumptions in Italy. To this aim time series data of per-capita expenditures and prices during the period 1960 to 2002 are used. Own price elasticities are negative and tobacco appears to be more responsive than alcohol demand, although both responses are less than unity. Cross price elasticities are also negative and asymmetric thus suggesting complementarity. A “double dividend” could then be exploited, because public policy needs to tackle the consumption of only one good to control the demand of both. These results show that the optimal strategy for maximizing public revenues would be to raise alcohol taxation more than tobacco taxation. Finally, past consumption of one addictive good does not significantly reinforce current consumption of the other

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This paper addresses the issue of whether environmental quality is a luxury good meaning that its demand increases more than proportionally with respect to income. We use demand analysis combined with household production to estimate the marginal willingness to pay for improvements in air quality in Italy and the corresponding income elasticity of willingness to pay. Choice based data on Italian households' current consumption expenditures from January 1999 to December 2006 merged with an air quality index are used. We consistently find that the income elasticity of willingness to pay for environmental quality is very close to one across income groups and that it decreases as a percentage of income as income increases with interesting implications for environmental policy. Besides contributing to a strand of literature where there is very scant empirical evidence, this paper provides the first attempt at estimating willingness to pay and its income elasticity using revealed preferences combined with household production.