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No pain, no gain: implications in consumption and economic growth

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  • Sun, Tianyu
  • Tian, Liu

Abstract

Demand saturation occurs along with economic development, but the theoretical basis for demand saturation is lacking. This study adds to literature by proposing a novel concept named utilization cost, which denotes the physical or mental burden incurred to obtain utility. Correspondingly, we distinguish between quantity and quality of consumption and construct a general utility function. With a generative decision procedure, the analysis shows that utilization costs help to explain the economic dynamics across development stages in terms of demand saturation. And, the long-term state of demand is affected by the properties of utilization costs, determining development directions.

Suggested Citation

  • Sun, Tianyu & Tian, Liu, 2023. "No pain, no gain: implications in consumption and economic growth," SocArXiv 95fdm, Center for Open Science.
  • Handle: RePEc:osf:socarx:95fdm
    DOI: 10.31219/osf.io/95fdm
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    References listed on IDEAS

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