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Utilization burden: implications in consumption and economic growth

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    Abstract

    Demand saturation occurs with economic development, but the theoretical basis is lacking. This study proposes a novel concept named utilization burden, which denotes the physical or mental burden incurred to obtain utility. Correspondingly, we distinguish between quantity and quality of consumption, construct a general utility function, and derive an indicator named demand saturation rate. With a generative decision procedure, the analysis shows that the utilization burden helps to explain the economic dynamics across development stages. In particular, quantitative growth in developing countries may decline as demand saturation rate increases, but the quality of consumption would improve as development patterns shift from quantity-priority to sustainable growth. And, economic fluctuations in developed countries may revolve around a sustainable growth path that can be characterized by the demand saturation rate. Moreover, the properties of the utilization burden can affect demand saturation rates and development directions in the long run. The topological transformation of the feasible region in the 3D surface of the utility function can explain the mechanism intuitively.

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  • , 2023. "Utilization burden: implications in consumption and economic growth," SocArXiv 95fdm_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:95fdm_v1
    DOI: 10.31219/osf.io/95fdm_v1
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