ISQOLS Webinar, "The Costs of Social and Environmental Degradation in Affluent Economies"

When
9 Apr 2025
5:00 PM
Location
Online Webinar

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The webinar is free for all participants.

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ISQOLS Webinar,

"The Costs of Social and Environmental Degradation in Affluent Economies"

Presenter: Giulia Slater, PhD

Wednesday 9 April 9, 2025

11:00am EDT/5:00pm CEST

Negative externalities of economic growth can deteriorate common goods, such as natural and social capital. Individuals’ attempts to defend from such deterioration stimulate consumption, thus fuelling new economic growth. This growth is known as defensive growth. What is not known is how much is defensive consumption in affluent economies, that is, the amount of consumption that rich countries devote to protect their well-being against increasing social and environmental degradation. In this paper, we provide a first estimate of the value of the consumption needed for societies to maintain their well-being unchanged. To do so, we conduct a regression analysis of life satisfaction on aggregate consumption levels and various social and environmental externalities (which we refer to as "bads"). Using the method of compensating differentials, we estimate the monetary valuation of social and environmental disruption for which no market price exists. Our estimates suggest that the compensating consumption for social and environmental bads ranges between 300 and 3500 dollars. These expenses drive economic growth, but as they derive from worsening social and environmental conditions, they make growth an inadequate measure of social progress.

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Quality-of-Life Studies
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