CONSUMPTION AS AN ACTIVITY AND THE ROLE OF KNOWLEDGE IN ENVIRONMENTAL DYNAMICS

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