Altruism, voluntary contributions and neutrality: The case of environmental quality

This paper develops an intertemporal model wherein production generates pol lution, which is viewed by consumers as a public bad. There are two types o f consumer: those who are altruistic and leave bequests to their children, and those who are pure life-cyclers. Both types voluntarily contribute to t he quality of environment through environmental groups. It appears that, if bequests by altruists and voluntary contributions by all are positive, red istribution is neutral-which does not mean that pollution abatement and cap ital accumulation are optimal. To achieve optimality, one needs a tax on in heritance and a differential subsidy on all consumer contributions.