When is frugality optimal?

Bertrand Crettez, Naila Hayek and Georges Zaccour

Mathematical Social Sciences, 2023, vol. 125, issue C, 65-75

Abstract: We consider an optimal growth model in which the decision maker chooses the consumption path that maximizes her utility over a finite planning horizon. At each instant of time, she can opt for a regular product that pollutes the environment, or a non-polluting frugal product, which procures, however, lower utility. Depending on the parameter values, different optimal paths can materialize, including some where a frugal lifestyle is on the rise, and others where polluting persists during the planning horizon.

Keywords: Optimal consumption; Optimal growth; Frugality; Environment; Dynamic optimization (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:125:y:2023:i:c:p:65-75

DOI: 10.1016/j.mathsocsci.2023.07.006

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