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THE BURDEN OF DURABLE ASSET ACQUISITION IN GROWING POPULATIONS
Author(s) -
O'Sullivan Jane N.
Publication year - 2012
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2011.02125.x
Subject(s) - economics , diseconomies of scale , asset (computer security) , per capita income , per capita , population , circumstantial evidence , population growth , econometrics , microeconomics , geography , demography , economies of scale , computer security , archaeology , sociology , computer science
While most analyses of economic impacts of population growth have been equivocal, this article describes a new perspective from which the effects are strongly negative. The economies and diseconomies of population size are largely circumstantial and empirically inconsistent, but those of growth rate are intrinsic and consistent. These impacts are not apparent on income and per capita GDP, but on costs. The article estimates these costs using the logic of calculus rather than marginal accounting. Specifically, the cost of maintaining per capita capacity of durable assets, including infrastructure, equipment and skilled personnel, is increased by population growth by a factor proportional to the working lifespan of the asset class.