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Renewable resource and capital with a joy-of-giving resource bequest motive


  • Bréchet, Thierry
  • Lambrecht, Stéphane


In this article we ask whether a privately owned natural renewable resource can be conserved and managed efficiently when households have a joy-of-giving resource bequest motive. We model an overlapping generations economy in which firms have access to a CES production technology combining the natural resource, physical capital and labor. Our results shed light on the interplay between the resource bequest motive and the substitutability/complementarity relationship between capital and the natural resource in the determination of the equilibrium propensity to use the resource. The mere existence of the bequest motive does not guarantee that the resource will be conserved in the long run. When the resource is highly substitutable with capital, the equilibrium actually never exhausts the resource stock whatever the intensity of the bequest motive. When the resource is a poor substitute for capital, the equilibrium preserves the resource only if the taste for bequeathing is strong enough. Be the economy in over-accumulation or in under-accumulation of the natural resource, it always increases aggregate consumption to run the stock of capital at a level lower than the efficiency level.

Suggested Citation

  • Bréchet, Thierry & Lambrecht, Stéphane, 2011. "Renewable resource and capital with a joy-of-giving resource bequest motive," Resource and Energy Economics, Elsevier, vol. 33(4), pages 981-994.
  • Handle: RePEc:eee:resene:v:33:y:2011:i:4:p:981-994
    DOI: 10.1016/j.reseneeco.2010.06.003

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    References listed on IDEAS

    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Koskela, Erkki & Ollikainen, Markku & Puhakka, Mikko, 2002. "Renewable Resources in an Overlapping Generations Economy Without Capital," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 497-517, May.
    3. Markku Ollikainen, 1998. "Sustainable Forestry: Timber Bequests, Future Generations and Optimal Tax Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(3), pages 255-273, October.
    4. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    5. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    6. Karl Farmer, 2000. "Intergenerational natural-capital equality in an overlapping-generations model with logistic regeneration," Journal of Economics, Springer, vol. 72(2), pages 129-152, June.
    7. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    8. Thierry Brechet & Stephane Lambrecht, 2009. "Family Altruism with Renewable Resource and Population Growth," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 60-78.
    9. Mourmouras, Alex, 1991. " Competitive Equilibria and Sustainable Growth in a Life-Cycle Model with Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(4), pages 585-591.
    10. Olson, Lars J. & Knapp, Keith C., 1997. "Exhaustible Resource Allocation in an Overlapping Generations Economy," Journal of Environmental Economics and Management, Elsevier, vol. 32(3), pages 277-292, March.
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    Cited by:

    1. Eskander, Shaikh M.S.U. & Barbier, Edward B., 2017. "Tenure Security, Human Capital and Soil Conservation in an Overlapping Generation Rural Economy," Ecological Economics, Elsevier, vol. 135(C), pages 176-185.
    2. BALESTRA, Carlotta & BRECHET, Thierry & LAMBRECHT, Stéphane, 2010. "Property rights with biological spillovers: when Hardin meets Meade," CORE Discussion Papers 2010071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Birgit Bednar-Friedl & Karl Farmer, 2013. "Time consuming resource extraction in an overlapping generations economy with capital," Journal of Economics, Springer, vol. 110(3), pages 203-224, November.
    4. Eskander, Shaikh M.S.U. & Barbier, Edward B., 2017. "Tenure security, human capital and soil conservation in an overlapping generation rural economy," LSE Research Online Documents on Economics 69196, London School of Economics and Political Science, LSE Library.
    5. Eskander, Shaikh M.S.U & Barbier, Edward B., 2015. "Tenure security and soil conservation in an overlapping generation rural economy," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205225, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    6. Birgit Bednar–Friedl & Karl Farmer, 2014. "Existence and efficiency of stationary states in a renewable resource based OLG model with different harvest costs," Graz Economics Papers 2014-07, University of Graz, Department of Economics.
    7. Stan Metcalfe, 2014. "George Shackle and The Schumpeterian Legacy," Graz Economics Papers 2014-08, University of Graz, Department of Economics.
    8. T.V.S.Ramamohan Rao, 2011. "Contemporary Relevance and Ongoing Controversies Related to the CES Production Function," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(2), pages 36-57, July.

    More about this item


    Overlapping generations; Renewable resource; Altruism; General equilibrium;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics


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