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When is frugality optimal?

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  • Crettez, Bertrand
  • Hayek, Naila
  • Zaccour, Georges

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.

Suggested Citation

  • Crettez, Bertrand & Hayek, Naila & Zaccour, Georges, 2023. "When is frugality optimal?," Mathematical Social Sciences, Elsevier, vol. 125(C), pages 65-75.
    • Handle: RePEc:eee:matsoc:v:125:y:2023:i:c:p:65-75
    DOI: 10.1016/j.mathsocsci.2023.07.006
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