Sustainable consumption

					              Sustainable consumption in an evolutionary framework:
                             How to foster change ?

                           Nathalie Lazaric° and Vanessa Oltra°°


° GREDEG University of Nice Sophia Antipolis
Lazaric@gredeg.cnrs.fr

°°GREThA University of Bordeaux
oltra@u-bordeaux4.fr


                   Proposal for the EAEPE Conference, Bordeaux 2010.


Extended abstract

As all economic activity aims at satisfying the needs of consumers, consumers' behaviour
has an essential role to play in any transition towards a more sustainable economy. Some
authors argue that to approach a sustainable state, consumers will have to reduce their level
of consumption and modify the kind of goods they consume (Arrow et al., 2004; Wagner,
2006). Even if a consensus is emerging on the idea that a change in patterns of consumption
is necessary, it remains unclear how this change can be induced and what are more
precisely the types of changes that are needed.

Evolution of tastes, preferences and consumption are ones of the most thorny matters,
researchers and practionners have to solve for explaining current consumption with its future
trends (Unruh 2000; Dolfsma 2002; Earl and Potts 2004). Whereas “mainstream” frameworks
seem well equiped to provide “efficient” answers to these issues, evolutionary theories by
providing a distinctive and non unified answer, may lack consistency and robustness
regarding policy recommendations (Maréchal and Lazaric, 2010; Nelson and Consoli, 2010).
But even if the demand side has been neglected by evolutionary economists, evolutionary
research on bounded rationality, microeconomic behaviours, as well as the role of routines
and learning mechanisms can provide a relevant framework to understand consumers'
behaviours and demand dynamics (Metcalfe, 2001; Witt, 2001).

The purpose of this proposal is to show that an evolutionary approach to consumption can
bring new insights on the issue of sustainable consumption, and more particularly, on the
factors of change and inertia in patterns of consumption. By explaining the presence of
potential habits and routines in daily consumption, such an evolutionary approach can shed
light on dispositions, motivations and permanent gap between intention and acts in daily
consumption behaviours. Additionnaly by putting emphasis on learning and social
interactions, these perspectives make clear how changes of our daily consumption via
imitation and the diffusion of social norms may occur.

1. Aim of the study: Environmental preferences and consumers' choices

Without entering into details in the debate on the definition of sustainable patterns of
consumptions, an economic approach of sustainable consumption involves a discussion on
how some environmental dimensions may be included in consumers' preferences and how
they can contribute to consumers' utility or satisfaction.
In this first section, we focus on environmental or ecological preferences. The point is to
discuss whether agents can have environmental preferences and, if yes, how they can be
defined and formed. Environmental preferences can be broadly defined as the consideration
of environmental aspects (polluting emissions, CO2 emissions, ecological footprint etc.) in
consumer choices. Even if we know that the formation of environmental preferences might
be insufficient to entail a concrete change in behaviours, we can argue that environmental
preferences can lead consumers to take into account some ecological or environmental
criteria in their purchase decisions and so to modify their priorities and choices. So the
question is how such environmental preferences can be formed and then revealed by
consumers' choices (Oltra, 2009).

Recent theorizing in evolutionary economics studies consumer behaviour as shaped by
complex processes of individual and social learning (Buenstorf and Cordes, 2008). This
learning theory of consumption remains within the utilitarian tradition of economics
suggesting that acts of consumption are motivated by their capacity to fulfil human wants. In
this perspective, consumers have to acquire explicit knowledge on the characteristics of
goods, as well as on the links between goods and the satisfaction of wants. In case of
sustainable consumption, the question that immediately comes out is the one of the
existence of an 'ecological or green' want. According to a Mengerian vision of goods, a
human need and an explicit knowledge on the causal connection between the good and the
satisfaction of the need is necessary for a thing to become a consumed good (Menger,
1950). In the case of sustainable consumption, it implies that consumers must have a need
or a want for 'ecological goods', information on the environmental characteristics of goods
and knowledge on the link between these characteristics and the satisfaction of wants (Oltra,
2009). As a consequence, available information, as well as consumers' knowledge and
perceptions, will play a key role in the formation of environmental preferences.

But environmental preferences cannot be a sufficient condition for inducing changes in
consumer behaviours, in particular if the new patterns of consumption involve radical
changes. We should not forget that one of the main criteria of consumers' choice is the price
of goods. The question of the effects of price on technology diffusion has been developed in
the literature on technological competition, in particular by Christensen (1997) in his work on
"technology disruption". This piece of literature can be very relevant in order to discuss the
role of demand dynamics in the diffusion of green products. We propose to review the main
results of the literature on demand dynamics and technology disruption to show that the
adoption of new sustainable patterns of consumption also depends on the tradeoffs and
synergies between the various characteristics (environmental and non-environmental) of
products and on the price premium associated to eco-products.


2. An analytical framework with evolutionary insights: the role of habits and routines
in daily consumption

Consumption studies, in particular in psycho-sociology, emphasize the strong role of habits
and routines. Most consumption decisions do not result from deliberation and decision
processes, but from the replication of past decisions and habits (Aarts H. and Dijksterhuis,
2000). The literature on the role of habits shows that the more regular the consumption act,
the stronger the weight of habits and routines. This is mainly what explains the tendency to
inertia in consumption behaviours.

To summarize, we can say that habits, routines and explicit deliberative process coexist to
varying degrees as determinants of most consumption acts (Aversi et al., 1997). These
dimensions should be taken into account when dealing with policy instruments seeking to
influence and to modify consumers' behaviours. It mainly implies that this type of policy has
to cope with many barriers and sources of inertia in the sense that habits mainly act as a
source of lock-in.

Cowan et al. (1997, p. 715) explain this process of unconscious consumption inertia with the
importance of path dependency and suggest to the need for examining closer the
consumer„s own past consumption history. They distinguish various groups which may affect
the creation and formation of consumer behaviour: the peer group, the contrast group and
the aspirational group (Cowan et al. p. 712). This may explain the evolution of consumption
and the interdependencies between various groups of consumers which have (or not) an
active role in influencing consumption. Consumption here is shaped by social interactions but
also by the importance of the past (Reinstaller and Sanditov, 2005; Malerba et al., 2007).

In this vein, some recent models try to depict the cultural dimension inside social learning,
notably how „green‟ attitudes towards consumption have to be learned with diverse
incentives systems (for example „eco taxes‟) which may play a role in promoting new kinds
consumption patterns (Buensdorf and Cordes, 2008). Their model suggests going beyond
the assumption of a permanent „lock in‟ by demonstrating the possibility of learning and
change inside consumption patterns (Buensdorf and Cordes, ibid; Witt 2001). In this context,
consumers‟ characteristics are essential (Swann 2001) for the broader diffusion of green
products (Janssen and Jager 2002). So are their number and the connections among them -
i.e. local and/or global externalities - for switching in favour of “green” products (Tomochi et
al., 2005).

3. Expected results : Policy implications

In this section, we discuss the policy implications of our approach to sustainable
consumption. We argue that evolutionary theories may enlarge policy makers‟ frameworks
about sustainable consumption. This includes sheding light on conflicting values present in
daily consumer‟s choices, on complexity and ambiguity in the evolution of preferences, on
consumers‟ willingness to implement real changes (i.e beyond solely their intentions).
Various consequences, such as changes in supply side, social interactions along the
demand side with their various externalities, changes coming from institutions such as
national innovation systems, will be depicted for going beyond a solely microeconomic vision
of economic systems.

In microeconomic terms, sustainable consumption involves the formation of environmental
preferences which translate into more sustainable choices. In other words, there is a need for
a transition from ecological values to intentions, and finally, to ecological choices and
behaviours. This transition is very problematic and needs to be supported by various policy
instruments. The basic idea is that sustainable consumption must not be necessarily oriented
only towards ecological objectives, but also compatible with hedonic motivations and basic
needs of consumers. The objective is not to oppose hedonic consumption and sustainable
consumption, but to think about how consumers can find some trade-offs and synergies
between them.



Keywords:

Sustainable consumption, preferences, environmental issues, habits, routines, motivation,
choices.
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