Georgescu-Reogen's Consumer Choice Theory and Its Relevance to Sustainability Issues

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First of all, we examine Georgescu-Roegen's interesting ideas which have not received full exam-ination, but which should be fully investigated in terms of the further theoretical development of utility theory as well as for their importance to sustainability : (1) Volterra paradox ; (2) hierarchy of wants ; (3) lexicographic ordering ; (4) comparability and the ordinalist fallacy ; (5) marginal utility of money ; (6) principles of the irreducible of wants versus commensurability of wants ; (7) directional choice and irreversibilities ; (8) principle of perseverance of nonpreference direction ; (9) the heredity postulate ; (10) measurability of utility ; (11) transitivity and integrability ; (12) stochastic binary choice envisioned originally by Pareto.There are two main results from our research.(1) we discuss the general case of a saturation region which is a convex closed area. In our saturation region, we show that we cannot obtain the general utility index applicable to the evalua … More tion of natural resources and environmental services usually adopted by neoclassical economists.(2) we show that lexicographic ordering does not satisfy the postulate of linearity, which is one of the three necessary postulates for a set to be a linear continuous series. These three postulates are (1) Dedekind's postulate ; (2) Postulate of Density ; (3) Postulate of Linearity. We argue that most of the environmental services supplied to humans belong to this category of "commodity", especially biological diversity. Thus, inclusion of these services in CVM could produce erroneous information.We presented two papers :1. Mayumi, K."The Foundations of Consumer Choice Theory and Environmental Valuation", Nicholas Georgescu-Roegen's Scientific Work, Strasbourge, France, Nov. 6-7, 1998.2. Mayumi, K."Georgescu-Roegen's Consumer Choice Theory and Its Relevance to Sustainability Issue". The Fifth Biennial ISEE (International Society for Ecological Economics) Conference, Beyond Growth : Institutions and Policies for Sustainability, Santiago, Chile, Nov. 15-18, 1998. Less