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Complementarity, impatience, and the resilience of natural-resource-dependent economies

Author

Listed:
  • Martin F. Quaas

    (Department of Economics, University of Kiel, Germany)

  • Daan van Soest

    (VU University Amsterdam and Tilburg University, The Netherlands)

  • Stefan Baumgaertner

    (Department of Sustainability Sciences and Department of Economics, Leuphana University of Lueneburg, Germany)

Abstract

We study how human preferences a ect the resilience of economies that depend on more than one type of natural resources. In particular, we analyze whether the degree of substitutability of natural resources in consumer needs may give rise to multiple steady states and path dependence even when resources are managed optimally. This is a major shift in the interpretation and analysis of resilience, from viewing (limited) resilience as an objective property of the economy-environment system to acknowledging its partially subjective, preference-based character. We nd that society tends to be less willing to bu er exogenous shocks if resource goods are complements in consumption than if they are substitutes. Hence, the stronger the complementarity between the various types of resource goods, the less resilient the economy is.

Suggested Citation

  • Martin F. Quaas & Daan van Soest & Stefan Baumgaertner, 2011. "Complementarity, impatience, and the resilience of natural-resource-dependent economies," Working Paper Series in Economics 220, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:220
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    Cited by:

    1. Cairns, Robert D. & Del Campo, Stellio & Martinet, Vincent, 2019. "Sustainability of an economy relying on two reproducible assets," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 145-160.
    2. Richter, Andries & Dakos, Vasilis, 2015. "Profit fluctuations signal eroding resilience of natural resources," Ecological Economics, Elsevier, vol. 117(C), pages 12-21.
    3. Martinet, Vincent & Del Campo, Stellio & Cairns, Robert D., 2022. "Intragenerational inequality aversion and intergenerational equity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    4. Shao, Shuai & Yang, Lili, 2014. "Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing," Energy Policy, Elsevier, vol. 74(C), pages 632-642.
    5. Can Askan Mavi & Nicolas Quérou, 2020. "Common pool resource management and risk perceptions," DEM Discussion Paper Series 20-25, Department of Economics at the University of Luxembourg.
    6. Lancker, Kira & Bronmann, Julia, 2020. "Quantifying consumers’ love for marine biodiversity," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304214, Agricultural and Applied Economics Association.
    7. Can Askan Mavi & Nicolas Quérou, 2020. "Common pool resource management and risk perceptions," CEE-M Working Papers hal-03052114, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    8. Stein Ivar Steinshamn, 2017. "Predators in the market: implications of market interaction on optimal resource management," Journal of Bioeconomics, Springer, vol. 19(3), pages 327-341, October.
    9. Gustav Engström & Johan Gars, 2016. "Climatic Tipping Points and Optimal Fossil-Fuel Use," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(3), pages 541-571, November.
    10. Kira Lancker & Julia Bronnmann, 2022. "Substitution Preferences for Fish in Senegal," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 1015-1045, August.
    11. Stefan Baumgärtner & Moritz A. Drupp & Martin F. Quaas, 2017. "Subsistence, Substitutability and Sustainability in Consumption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(1), pages 47-66, May.
    12. Eli P Fenichel & Yukiko Hashida, 2019. "Choices and the value of natural capital," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 120-137.
    13. Gars, Johan & Spiro, Daniel, 2014. "Uninsurance through Trade," Memorandum 13/2014, Oslo University, Department of Economics.

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    More about this item

    Keywords

    Resilience; substitutes and complements; discounting; multiple steady states; natural resources; path dependence; regime shifts; tipping points;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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