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

Author

Listed:
  • BRECHET, Thierry
  • LAMBRECHT, Stéphane

Abstract

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • BRECHET, Thierry & LAMBRECHT, Stéphane, 2011. "Renewable resource and capital with a joy-of-giving resource bequest motive," LIDAM Reprints CORE 2434, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2434
    DOI: 10.1016/j.reseneeco.2010.06.003
    Note: In : Resource and Energy Economics, 33(4), 981-994, 2011
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    Citations

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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. David Desmarchelier & Alexandre Mayol, 2022. "To seed, or not to seed? An endogenous labor supply approach in a simple overlapping generation economy," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 25-38, January.
    3. David DESMARCHELIER & Alexandre MAYOL, 2020. "To seed, or not to seed," Working Papers of BETA 2020-04, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. BALESTRA, Carlotta & BRECHET, Thierry & LAMBRECHT, Stéphane, 2010. "Property rights with biological spillovers: when Hardin meets Meade," LIDAM Discussion Papers CORE 2010071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. 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.
    6. David Desmarchelier & Rémi Girard, 2023. "Renewable resource and harvesting cost in a simple monetary overlapping generation economy," Revue d'économie industrielle, De Boeck Université, vol. 0(4), pages 147-171.
    7. 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.
    8. repec:grz:wpaper:2014-07 is not listed on IDEAS
    9. repec:grz:wpaper:2014-08 is not listed on IDEAS
    10. 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

    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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