Environmental Impact of Using Restaurant/Recreation Services: Linkage between the Linked Input-Output Table for Environmental Analysis and LES Demand Function

Abstract

According to the 1985-90-95 linked Input-Output table for environmental analysis, in 1995 Japanese per capita CO₂ emission induced by consumption activities increased 1.3 times that of in 1985. In this study, firstly we consider why CO₂ emissions induced by consumers increased. We compare the environmental household account in each year and decompose the change of per capita induced CO₂ emission between 1985 and 95 into the effects of the consumption structure, income level and technological issue. From the decomposition analysis, we find some interesting facts. One of those is, the more part of consumption expenditure is used for services such as recreational services, the higher environmental load induced by household consumption becomes. Secondly, we try some hypothetical experiments and clarify the factor of such findings. Environment friendly behavior often pushes up the cost for consumers including opportunity cost and decreases the utility level. For example, cooking at home instead of using catering services increases the opportunity cost of housewives’ time and decreases the utility level due to inconvenience. However, per unit CO₂ emission induced by using catering services tends to be high. We estimate the demand function in linear expenditure system (LES) and try to find how some exogenous changes (for example, the decrease in relative price of catering and restaurant services or recreational services) affect the household’s demand structure, then the environmental load induced by household consumption. Through such study we are able to know what type of lifestyle is appropriate to “sustainable consumption society.”