When is Frugality Optimal?

27 Pages Posted: 7 Jul 2022

See all articles by Bertrand Crettez

Bertrand Crettez

University of Burgundy Franche-Comté - L.I.B.R.E.

Naila Hayek

affiliation not provided to SSRN

Georges Zaccour

HEC Montreal - Department of Decision Sciences

Abstract

We consider an optimal growth model in wich the decision maker chooses the consumption path that maximizes her utility over a nite 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, di⁄erent 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

Suggested Citation

Crettez, Bertrand and Hayek, Naila and Zaccour, Georges, When is Frugality Optimal?. Available at SSRN: https://ssrn.com/abstract=4156195 or http://dx.doi.org/10.2139/ssrn.4156195

Bertrand Crettez

University of Burgundy Franche-Comté - L.I.B.R.E. ( email )

avenue de l'Observatoire
F25030 Besancon
France

Naila Hayek

affiliation not provided to SSRN ( email )

No Address Available

Georges Zaccour (Contact Author)

HEC Montreal - Department of Decision Sciences ( email )

HEC Montreal
3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3 H3T 2A7
Canada

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