INDIVIDUAL BEHAVIOR AND COLLECTIVE ACTION TOWARDS THE ENVIRONMENT - AN ECONOMIC FRAMEWORK BASED ON THE SOCIAL CUSTOMS APPROACH

Environmental policy-making is often based on simple neoclassical econ omic models where human beings are treated in isolation from each othe r. In these models of atomized individual behaviour, the explicit cons ideration of social norms is ruled out. As a contribution to bridging the gap between simple economic theory and empirical evidence this pap er re-interprets the 'social customs' approach, which was developed in the context of the labour market, and examines whether it is an adequ ate framework for explaining recycling behaviour of households. It ass umes the existence of a particular social norm, plus a sensitivity of actors to their relative social standing dependent on perceived confor mity to that norm. These assumptions are shown to partly offset purely economic parameters, which, by themselves, could prevent voluntary co llective action towards the provision of a public good, such as enviro nmental quality. The approach helps explain why individuals contribute to the provision of such a good and thus offers a partial escape from the free-rider problem. Nevertheless, this paper stresses that purely economic motives are important and should be addressed by policy-make rs together with social motives.