Download CONSUMPTION AS AN ACTIVITY AND THE ROLE OF

CONSUMPTION AS AN ACTIVITY AND THE ROLE OF
KNOWLEDGE IN ENVIRONMENTAL DYNAMICS
Mario Cogoy
Department of Economics - University of Trieste - Piazzale Europa 1 - 34127 Trieste – Italy
Phone: ++39040-5587041- Fax: ++39040-567543 - Email: [email protected]
Abstract
This paper combines a time-allocation approach with a model of economic dynamics, based on the
accumulation of human capital. Consumption is modelled as an activity embedded in the environment,
taking place in time, and using knowledge in order to reduce the labour effort in production, and to
improve the quality of life. The accumulation of knowledge improves both the efficiency of production
and consumption activities, and technical progress is therefore extended to the realm of consumption.
This implies, that knowledge and technology accumulated in the consumption sector directly affect
welfare, and that the structure of preferences on time, consumption goods and consumption knowledge
significantly determines the dynamics of the economy and the environmental impacts of consumption
activities.
Keywords: Time Allocation; Human Capital; Consumption Activity; Consumption Knowledge
JEL Classification: D11; J22; O30; O41
1.
INTRODUCTION
In modern societies consumption requires a significant amount of effort. Consumption
takes time; it must be planned in advance, prepared and organised. Time, skills and
knowledge are inputs as necessary to consumption as are commodities, and the pattern
of combination of these inputs significantly determines the outcome. Consumption has
to be regarded therefore as a complex activity, rather than as an effortless absorption of
effortfully produced commodities.
Consumption is embedded in the natural environment. The environment influences the
quality of consumptive actions and serves as a receptacle for their outputs. All
ingredients of consumption activities (e.g.: consumption goods, time, knowledge, skills,
consumption capital, infrastructures, environmental quality, information, social
networks, etc.) are interwoven in a complex pattern of interaction, which determines
both the pleasure derived from consumptive activities, and also the impact of
consumptive activities on the environment. The pattern of interaction between different
components of consumptive actions may change over time, and these changes obviously
influence the use of the environment as an input and as a receptacle of consumptive
outputs. I shall focus in this paper on four basic ingredients of consumptive activities:
time, commodities, knowledge and the environment. Substitution between these inputs
(Spreng, 1993) affects the consumptive use of the environment. In particular, the
possibility of increasing the role of time and knowledge and of reducing the flow of
consumption goods entering consumptive actions may become an important instrument
for achieving sustainable consumption. For this reason, studying consumption as an
activity (and not just as an absorption of consumption goods) is the most appropriate
approach to identifying paths of sustainable consumption.
All kinds of activities require time, and therefore consumption also requires time, since
no pleasure, or “utility”, or “welfare” can be derived from consumption without making
use of a portion of the permanent flow of time. Spending time in a pleasant way is the
main target of consumption activities and I shall call the pleasant share of disposable
time of each individual: enjoyment time1. A certain amount of time has to be allocated
therefore to enjoyment, and enjoyment time delivers an important contribution to
welfare2. The intensity of enjoyment experienced in consumption activities depends
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however not only on the duration, but also on the quality of these activities. I shall
consider three factors influencing enjoyment quality: the flow of consumption goods
supporting each unit of enjoyment time, the knowledge applied to improving the
performance of consumptive actions, and the quality of the environment in which
consumptive activities take place.
Enjoyment time is serviced by a flow of commodities, entering as inputs into
consumptive activities. Individuals can choose a higher level of commodity intensity for
their consumption activities, if they feel that more elaborate lifestyles yield a better
quality of enjoyment. I shall assume a constant population of N identical individuals
involved in the same kinds of consumptive activities. Time available to each individual
is normalized to 1. E (enjoyment time) is the portion of time which each individual
allocates to enjoyment ( 0 ≤ E ≤ 1 ). C is total social consumption. Per capita
consumption c is:
c=
C
N
(1)
Consumption intensity of action, or material lifestyle, can be then defined as:
ϕ=
c
E
(2)
where ϕ is per capita consumption per unit of enjoyment time.
The quality of consumption is also influenced by knowledge and skills. Knowledge and
skills directly affect welfare in two ways. Welfare can be positively influenced by
personal individual skills of the consumer: a car trip will be more pleasant if the
consumer is a good driver; a match of tennis is more interesting, if it is played by skilful
players, etc. In complex modern societies however, knowledge plays a more pervasive
role, since in advanced industrial societies consumption is less and less dependent on
the direct use of individual commodities, and becomes increasingly rooted in sociotechnical systems, i.e. in networks of commodities, infrastructures and services. For
example, cars alone do not provide any transportation service, but only as components
of a network including roads, parking lots, repair shops, gasoline stations, insurance,
traffic rules and legislation, traffic police, and the like. In a similar way, energy services
depend on distribution networks, end use technologies, the quality of buildings, etc.
3
Residential comfort depends on neighbourhoods, on urban planning, on commuting
time, and on the aesthetic and energetic quality of buildings. The performance of
consumptive systems significantly depends therefore on the quality of the interactions
between the system parts, and commodities are only one component among many
others.
The welfare deriving from socio-technical systems significantly depends on the social
knowledge which is embodied in the design, and applied to the control, the operation,
and the evolutionary adaptation of such systems. For this reason, with increasing
complexity of consumption, the relative weight of knowledge in consumptive activities
raises, as compared to commodities (Cogoy, 2004). This implies, that a new space
opens up for the use of knowledge: knowledge does not only contribute to the design of
more efficient processes in the production of commodities, but also to the efficient
design and the operation of socio-technical systems. The same endowment with time
and commodities can lead to a higher level of welfare, if it is supported by a higher level
of knowledge and technology, since knowledge and technology serve to make a better
use of resources, not only in production, but also in consumption activities. This is a
direct consequence of assuming that technical progress pertains not only to the realm of
production, but also to the realm of consumption. In other words, knowledge and
technology do not only affect welfare indirectly, as they improve the efficiency of
production activities, but also directly, as they make a more efficient use of given
consumptive resources possible (Michael/Becker, 1973; Becker, 1976). Human capital
influences therefore the efficiency of consumption efforts in the production of welfare,
in a similar way, as the accumulation of human capital increases the efficiency of
factors in production.
Finally, the quality of consumptive actions is also influenced by the state of the
environment. I shall assume that, in a finite world, environmental quality basically
depends on the quantity of materials discharged into the environment. Materials are lost
in productive transformations, and are emitted into the environment after consumption
and as a consequence of capital depreciation. Although it is true, that eco-efficiency and
recycling can reduce materials emissions per consumptive unit, limits exist for
technological solutions, and it is not possible to sustain any level of consumption
without causing severe environmental disruption (Huesemann, 2003). I shall neglect
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capital depreciation and focus on the level of consumption as the main cause of
environmental degradation. I shall measure environmental quality A therefore as a
distance between actual total consumption cN and an hypothetical level of
unsustainable consumption C * which would cause unacceptable environmental
disruption.
A = C * − cN
(3)
In an activity oriented approach, commodities, time, knowledge and environmental
quality are functionally related to each other, and their interaction defines the
“enjoyment technology” individuals are adopting. Consider first the effects on
consumptive actions of a marginal increase in E . An increase in enjoyment time with
constant ϕ implies a temporal extension of activities of the same type, whereas an
increase, or a decrease in ϕ reflects a switch to activities of higher, or lower,
commodity intensity (or to higher, or lower, material lifestyles). For this reason, a
marginal increase in E will influence enjoyment activities in a contradictory way. On
the one hand enjoyment time will increase, but on the other hand commodity intensity
ϕ will decrease because of (2). The per capita flow of commodities c will have to be
“diluted” over an increased flow of time. Each unit of time will be serviced by a
reduced commodity flow, and this in turn means, that the type of consumptive activity
has changed to an activity of lower commodity intensity. A marginal increase in E will
therefore only have a positive influence on enjoyment, if the effect of an increase in
time prevails over the negative effect of a lower commodity intensity of action.
Consider next a marginal increase in commodity intensity ϕ . Again, such an increase
may have contradictory effects on welfare. If an increase in ϕ derives from an increase
in per capita consumption c , the positive effect on lifestyles will be matched by a
negative impact on the environment. A marginal increase in ϕ will only result in an
improvement in welfare, if the positive effects on lifestyles prevail over the negative
effects on the environment.
The functional relationship between time, commodity intensity, knowledge and the
environment makes the difference between the “doing” and the “having” approach in
welfare economics. In the “having approach “ a portion of time called “leisure” can be
5
directly enjoyed by simply abstaining from labour (Chase, 1967; Oulton, 1993;
Baldassarri / De Santis / Moscarini, 1994; Ladrón-de-Guevara / Ortigueira / Santos,
1999). In the leisure approach, commodities and time are not related to each other by
the functionality of action, and no question arises of what consumers will do with an
additional quantity of time. Strictly speaking, leisure does not exist in the present paper,
since disposable time can only be enjoyed if it is embedded in activities transforming
consumption goods, knowledge and environmental quality into time-dimensional
enjoyment of life. Enjoyment time is therefore not just a different word for leisure, but
rather denotes the difference between a leisure approach and an activity oriented
approach to enjoyment.
Under the above premises the welfare of each individual can be defined as:
U = U (E ,ϕ , H C , A)
U E ,U ϕ ,U H C , U A > 0
U EE ,U ϕϕ ,U H C H C ,U AA < 0
(4)
where H c is human consumption capital improving the design of socio-technical
systems in which enjoyable activities are embedded. ( U x is the partial derivative of U
with respect to argument x ). U = U (E ,ϕ , H C , A) can be interpreted as the individual’s
enjoyment technology, describing how time, commodity services to time units, the
quality of consumptive designs and of the environment are combined into activities
generating welfare. Knowledge and environmental quality play the role of public goods
in enjoyment activities, since the quality of socio-technical designs, as expressed in the
level of human consumption capital, and the quality of the environment improve the
intensity of enjoyment of all of society’s members.
It is important to note, that the level of commodity intensity ϕ and the level of
consumption knowledge H C are independent from each other. It may be historically
true that the progress of knowledge and technology has been accompanied by an
increase in the commodity intensity of enjoyable actions. No necessary causality
between the two should be assumed however. The level of commodity intensity is a free
choice of individuals, and different types of material lifestyles are compatible with the
same level of knowledge in consumption.
6
Of course, consumers may also have preferences on items other than E , ϕ , H C and
A . They may like other types of time expenditure, as e.g. research time spent in
accumulating human capital, or even production time. They may also appreciate
“conspicuous” commodities independently of their use in actions. The enjoyment
technology function may be extended therefore to contain other arguments, but I shall
use (4), in order to stress the main point of the present paper: enjoyment activities have
a time-dimensional output, and the production of qualified enjoyment time is the
primary final result of the economic process.
In an activity framework consumers can substitute to a certain extent between different
inputs to consumptive actions. They may be equally happy, for instance, if enjoyment
time is reduced and such a reduction is compensated by an increased commodity
intensity of action and/or an improved quality of the environment and/or of the design
quality of socio-technical systems.
Because of (2), it is feasible for individuals to increase ϕ to infinity by setting E = 0 ,
and choosing in this way an infinite commodity intensity of action, without allocating
any time to enjoyable activities. I shall call this kind of behaviour: commodity hoarding,
since welfare is derived in this case from “having” commodities, instead of “doing”
something with them. Commodity hoarding is a rather uninteresting oddity, and the
enjoyment technology has to be specified therefore in such a way, as to rule out
commodity hoarding and deliver interior solutions for E and ϕ . If enjoyment time,
commodity intensity and consumptive knowledge are bad substitutes, consumers will
not be interested in an unlimited expansion of commodity intensity at the expenses of
enjoyment time. Formally, if we specify the consumption technology as:
U =
(
1 λ
λ
E + ϕ λ + H C + Aλ
λ
)
λ<0
(4a)
commodity hoarding will not occur. I shall therefore study enjoyment dynamics in
sections 3 to 5 under the assumption of bad substitutability. λ < 0 is quite reasonable an
assumption, since it means, that time is essential in consumptive actions, and that
consumers are not willing to adopt enjoyment technologies based on commodity
hoarding.
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The focus of the present paper is not on the choice of individuals between different
types of consumption activities, but rather on the impacts of human capital
accumulation on the aggregate social process of consumption and on the aggregate
social use of time. The utility function has to be interpreted therefore as a description of
the aggregate consumption technology of an individual. Since all individuals are
assumed to be equal, social welfare is expressed by: NU , and the production of
aggregate social welfare is similar to the description of aggregate production in a single
production function.
The above described approach has some points in common with Becker’s theory of
“time allocation” and with household economics (Becker, 1965, 1976; Michael /
Becker, 1973; Stigler / Becker, 1977; Gronau, 1977, 1986; Juster/Stafford, 1991). Along
with Becker, utility is not defined on commodities, but on the outputs of activities.
Moreover, if enjoyment production is an effort requiring activity, and if technical
progress is considered to be a means of reducing effort to obtain a given result, there is
no reason to confine the effects of technical progress to the realm of production. The
accumulation of knowledge can improve the efficiency of enjoyment activities similar
to the way it fosters production (Becker, 1976; Michael/Becker, 1973; Stigler / Becker,
1977). The present paper focuses however on the fact that the output of enjoyment
activities is time-dimensional, so that it is necessary to allocate time not only to
production, but also to enjoyment. Enjoyment time is vital in consumptive actions and
cannot be rationalized away by “improvements” in the enjoyment technology.
The consumption technology has been introduced in this section. The other elements of
the model will be introduced in section 2. Sections 3 to 5 discuss the solution of the
model. Section 6 concludes.
2.
PHYSICAL PRODUCTION AND HUMAN CAPITAL ACCUMULATION
I shall model production and research along similar lines as are familiar from human
capital models of endogenous growth (Lucas, 1988; Rebelo, 1991), with only a few
minor changes.
8
Output Y is produced with the aid of capital K , labour and labour-augmenting
productive knowledge ( H P ):
Y = K ψ ( NPH P )
1−ψ
(5)
P is time allocated by each individual to production, NP is total social production
labour.
Productive and consumptive knowledge add to total social human capital:
H = H P + HC
(6)
Research time and human capital contribute to the accumulation of non-depreciating
human capital:
H& = δNRH
δ >0
(7)
where δ is a fixed productivity coefficient, H is the overall stock of social knowledge
(i.e. the sum of consumption human capital and production human capital), R is time
spent by each individual in research. NR is therefore total social research time.
Production and consumption knowledge act as externalities to assist labour in research.
Production and consumption are therefore rival uses of human capital, whereas its use
in research is non-rival.
The time budget constraint for the individual is:
E + P + R =1
(8)
There are three types of time expenditure for each individual: enjoyment time ( E ),
production time ( P ) and research time ( R ). It is assumed, that only enjoyment time
delivers welfare, whereas production and research are only justified, if they contribute
to the task of increasing the quality of enjoyment time. For this reason, the economy can
be described as a process of production of time by means of time. In this process,
production and research time contribute to the generation of time of higher quality
(enjoyment time), which is the final outcome of the economic process3.
Non-depreciating physical capital accumulates according to:
K& = Y − cN
(9)
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Equation (7) acts analogous to Lucas (1988) and Rebelo (1991) as a potential engine of
growth in the economy. The planner in charge of searching for the social optimum can
in principle turn off this engine by allocating no labour time to research and waiving in
this way the external benefits of human capital accumulation. Whether this is optimal or
not, depends on how individuals evaluate enjoyment time, lifestyles, the environment,
and the design quality of consumptive actions. Section 4 defines a stationary state in
which it is optimal not to use the growth engine.
3.
A MODEL OF TIME ALLOCATION AND CONSUMPTIVE ACTION WITH
ENVIRONMENTAL CONSTRAINTS
An optimal enjoyment path can be identified by solving the problem:
max
∫
∞
0
e − ρt
(
)
1 λ
λ
E + ϕ λ + H C + A λ dt
λ
(10)
subject to (2), (3) and (5) to (9). ρ is the rate of discount.
First-order conditions and the transversality conditions for this problem are:
µ1δNH = E
µ2 =
ϕλ
−
E
(11)
ϕ λ −1
− A λ −1
NE
E λ −1 −
HC
λ −1
λ −1
(12)
ϕλ
Y
= (1 − ψ )
P
E
= (1 − ψ )
Y
HP
 ϕ λ −1


− A λ −1 
 NE

 ϕ λ −1


− A λ −1 
 NE

H
µ& 1
= ρ − δN (1 − E ) − δNP C
µ1
HP
µ& 2
Y
= ρ −ψ
µ2
K
lim e − ρt µ1 H = 0
t →∞
(13)
(14)
(15)
(16)
(17)
10
lim e − ρt µ 2 K = 0
(18)
t →∞
µ1 and µ 2 are the shadow prices of human and physical capital respectively.
(11) to (18) together with the model constraints describe the optimal path.
Equations (13) and (14) state the optimal allocation conditions for time and human
capital respectively. An additional unit of enjoyment time has two opposite effects on
welfare. Additional time in consumptive actions increases welfare but at the same time
the commodity intensity of consumptive activities is reduced, since the same flow of
commodities now services an increased flow of time. The left hand of (13) summarizes
the net marginal welfare effect of an increase in enjoyment time. On the other hand, an
increase in production time contributes to output, and therefore to the commodity
intensity of consumptive actions, but also negatively affects the environment. The right
hand of (13) summarizes therefore the net welfare effect of a marginal time unit in
production.
Similarly, equation (14) equates a marginal effect of a design improvement of
consumptive activities with the marginal effect of an increase of knowledge in
production.
The above described model will not generate unbounded growth, since the economy is
constrained by the negative effects of consumption on the environment and by bad
substitutability in consumptive activities. Section 4 analyses the stationary state of the
economy. Section 5 describes the transitional path to the stationary state.
4.
THE STATIONARY STATE
The stationary point can be obtained from (2), (3), (5) to (9) and (13) to (16) by setting:
µ& 1 = µ& 2 = H& = K& = 0 .
After eliminating all other variables, one can obtain stationary values for enjoyment
time E and per capita consumption c from:
(1 − ψE )E
− 2λ
−c
−λ
(1 − E ) − (1 − ψ )N
λ
E
1− λ
 cN 
 *

 C − cN 
1− λ
=0
(19)
11
[
c= E
− 2λ
+E
1− λ
(1 − E )
− 2λ
]
Ω( E )
−1
λ
(20)
where:
λψ
 ρ  1−ψ  ρ − δ N (1 − E ) 
Ω(E ) =   

δN

ψ  
λ −1
(21)
The graph of (19) has an initial point: c = 0 for E = 0 , and a final point
C*
c=
N+N
1
1− λ
for E = 1 .
The graph of (20) has a discontinuity at E =
δN − ρ
and a final point: c = 1 for E = 1 .
δN
The shapes of the graphs depend on the values of the parameters. For parameter values:
δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2 the graphs of the two functions are:
Figure 1
For the two graphs to cross
N+N
1
1−λ
< C*
(22)
must be satisfied. This condition requires that the size of the population does not exceed
limits compatible with environmental sustainability.
From (5), (9), (15) and (16) the stationary values of physical and human capital can be
derived:
K=
ψ
cN
ρ
(23)
ψ
c  ρ  1−ψ
 
HP =
1 − E  ψ 
(24)
12
HC =
c
(1 − E )
2
ρ
 
ψ 
ψ
1−ψ
 ρ − δ N (1 − E ) 


δN


(25)
Figures (2) to (4) illustrate the effects of variations in ρ , λ and N on the stationary
values of c and E .
Figure 2
Figure 2 shows the effects of discounting on the stationary state of the economy: the
lower the rate of discount, the more will enjoyment time approach its maximum level of
1 (which means that production labour is substituted by human and physical capital),
and the closer will per capita consumption approach its maximum level, which is equal
to:
C*
N+N
1
1− λ
. Since consumption is higher, environmental quality will be lower in the
stationary state with a lower rate of discount. This result is in contradiction with
conventional wisdom on the environmental effects of the rate of discount. In this model
high discounting is good for the environment, since high discounting discourages the
development of economic forces at an earlier stage. The result is that stationary
consumption will be lower, and the state of the environment will therefore be better, if
the rate of discount is higher.
Figure 3
Figure 3 shows similar effects of an increase in λ on the stationary state:
Figure 4
Figure 4 shows that the effects of a population increase will be positive on enjoyment
time in the stationary state. Per capita consumption will not necessarily rise. For a
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population increase from N = 2 to N = 4 the graph shows a decline in per capita
consumption. The reason for this behaviour of the economy is straightforward: an
increase in the size of the population will boost the potentialities of research. Given
environmental constraints on physical output, research will be directed towards
substituting labour in production (and extending in this way enjoyment time), and
improving the design of socio-technical systems.
5. TRANSITIONAL DYNAMICS
Transitional dynamics can be numerically calculated for given parameter values. I shall
use GAMS-CONOPT to calculate optimal paths. For the state variables I assume initial
values: H (0) = 5; K (0) = 1 . The results of the calculations are summarized in Figure 5.
Figure 5
Time is initially allocated to research, production and enjoyment. As time elapses and
human capital is accumulated, time is shifted from research and production to
enjoyment and the rate of discount decides how far this shift will go.
Total consumption increases and environmental quality therefore declines to its
stationary state level.
Productive knowledge is required to increase output and to substitute for productive
labour as time is shifted from production to enjoyment. For this reason productive
knowledge grows faster than consumptive knowledge in the first section of the
transitional path.
The capital-labour relationship is continually rising, since capital accumulates and
labour time is shifted to enjoyment. The capital-augmented labour relationship reveals a
more complex pattern: it declines first, as a consequence of the rapid increase in
productive knowledge and increases in the second section of the transitional path as
productive human capital approaches its stationary level. In this way, shifts in the time
structure reflect themselves in the capital-labour dynamics.
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6.
CONCLUSIONS
In the preceding sections I have argued, that considering consumption as an activity
significantly affects the description of the dynamic behaviour of the economy. In an
activity framework, not only consumption goods, but also other ingredients of
consumptive actions, as enjoyment time and the design quality of consumptive
activities, become important in the production of welfare. The long run dynamics of the
system depends therefore on the behaviour of all components of consumptive activities
over time. Environmental constraints limit the physical growth of the system in the long
run. Bad substitutability makes of enjoyment time an essential ingredient of action, and
the extension of enjoyment time becomes one of the outcomes of the progress in
knowledge and technology. The dynamic forces of the system are also directed at
increasing the design quality of consumption to levels determined by the rate of
discount.
“Leisure” is not a credible candidate for modelling the complexity of consumption in
modern societies, since the notion of leisure admits a third use of time besides
production and research, but ignores the functional relation between time, commodities,
knowledge and the environment in consumptive actions.
Know-how in consumption is as important as know-how in production. Insisting on
skills, knowledge and technical progress in consumption activities 4 serves to move a
step towards a more realistic view of technical progress in the process of growth. It may
be argued, that one of the outstanding features of technical progress is the opening up of
alternative possible choices in lifestyles. At a high level of knowledge and technology,
extending enjoyable time and improving the design quality of consumptive systems are
valid alternatives to the target of increasing per-capita consumption. Economic theory
should provide an analytical framework to investigate such possibilities.
The approach presented here also has implications for environmental policies (Cogoy,
1999), since the absolute mass of commodity production is, with all necessary
qualifications, a major source of environmental damage (Daly, 1992). The expansion of
enjoyment time and the design quality of consumption are valid alternative targets to
pursue in view of the progress of knowledge and technology. For this reason, it is
15
important, that models adopted to investigate dynamics and change allow for more
alternative sources of welfare, than just material consumption. The study of the
endogenous structure of time and of the role of knowledge in consumption is therefore
not only a realistic tool for the analysis of the effects of technical progress in modern
societies, but also an important analytical element for the study of sustainable paths of
economic development.
16
Notes
1
“Enjoyment of life” is, according to Georgescu-Roegen (1966, p.97), the final result of
the economic process.
2
I ignore the survival sector of the economy in this paper, and assume therefore, that
economic activities are mainly directed at delivering amenities of life, after the
fundamental needs of society have been satisfied.
3
It must be noted, that the conceptualisation introduced in this paper has nothing in
common with the conceptualisation (paid work and leisure) commonly used in timebudget-analysis (Gershuny, 1993). Production labour refers to the output of the process
(commodities) and not to the forms of payment. Enjoyment time can be paid, if people
manage to get payments for doing what they like. The distinction between production
and consumption activities does not necessarily coincide with the distinction between
the market and the non-market sector of the economy. Since I do not address the
question of how production and consumption processes are socially organised (market
vs. non-market social organisation), the question of payments is here irrelevant. (On
market vs. non-market organisation and the social embeddedness of consumption, cf.
Cogoy, 1999)
4
Although “consumption skills” and “consumption knowledge” are rarely recognised in
models of economic dynamics, they are widely accepted as important analytical tools in
time-use studies (Gershuny, 1993) and in consumer research (Park / Mothersbaugh /
Feick, 1994). “Consumption capital” and learning in consumption (“beneficial
addiction”) are central ideas in Stigler/Becker, 1977. On “consumption knowledge” and
“consumption skills” cf. also Witt, 1998 and Cogoy, 1999.
17
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19
15
c
10
5
E
0
0,6
0,8
1
The stationary state
Parameter values: δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2
Figure 1
20
15
c
10
5
E
0
0,6
0,8
1
A decrease in the rate of discount
Parameter values: δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2
Broken line: ρ = 0.5
Figure 2
21
15
c
10
5
E
0
0,6
0,8
1
An increase in λ
Parameter values: δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2
Broken lines: λ = − 0.4
Figure 3
22
15
c
10
5
E
0
0,6
0,8
1
A population increase
Parameter values: δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2
Broken lines: N = 4
Figure 4
23
60
HP
40
HC
20
t
0
0
10
20
30
15
C
10
K
5
t
0
0
10
20
30
1
E
0,5
P
R
t
0
0
10
20
30
24
8
ϕ
4
t
0
0
10
20
30
K
40
NP
20
t
0
0
10
20
30
1
K
NPH P
0,5
t
0
0
10
20
30
Transitional dynamics
Parameter values: δ = 1; ρ = 0.6; λ = −0.5; ψ = 0.5; C * = 50; N = 2
Initial values: H (0) = 5; K (0) = 1
Figure 5
25