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Household decision-making with inflationary environment and the Cobb-Douglas utility

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dc.contributor.authorWang, Haoen
dc.contributor.authorZhang, Wuqien
dc.contributor.authorLiu, Dongdongen
dc.contributor.authorXu, Linen
dc.contributor.authorWang, Ningen
dc.date.accessioned2026-05-28T13:53:07Z
dc.date.available2026-05-28T13:53:07Z
dc.date.issued2025-08-20en
dc.description.abstractIn this study, we investigate the optimal investment-consumption-insurance decisions faced by a wage earner operating within an inflationary environment, utilizing a continuous finite time framework. We posit that the wage earner’s preference is described by the Cobb-Douglas utility function, which incorporates a parameter that reflects the elasticity of substitution between consumption and leisure. Additionally, we assume that the financial market comprises three distinct financial assets: a risk-free bond, an index bond and a stock. To obtain closed-form solutions for optimal strategies and value function, we utilize the martingale method in conjunction with duality theory. Finally, the impact of several model parameters on optimal strategies is explored through numerical simulation utilizing predefined parameters.en
dc.description.sponsorshipThis work was supported by the National Natural Science Foundation of China [12301597], Natural Science Foundation of Anhui Province [2408085MA019] and Futures Scheme at Australian National University.en
dc.description.statusPeer-revieweden
dc.format.extent23en
dc.identifier.issn0003-6846en
dc.identifier.otherORCID:/0000-0002-7667-2423/work/190440729en
dc.identifier.urihttps://hdl.handle.net/1885/733809670
dc.language.isoenen
dc.provenanceCC BY-NC-ND This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License http://creativecommons.org/licenses/by-nc- nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent, as at 26/05/2026.en
dc.rights© 2025 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.en
dc.sourceApplied Economicsen
dc.titleHousehold decision-making with inflationary environment and the Cobb-Douglas utilityen
dc.typeJournal articleen
dspace.entity.typePublicationen
local.bibliographicCitation.lastpage23en
local.bibliographicCitation.startpage1en
local.contributor.affiliationWang, Hao; Anhui Normal Universityen
local.contributor.affiliationZhang, Wuqi; Wuhu Universityen
local.contributor.affiliationLiu, Dongdong; Anhui Normal Universityen
local.contributor.affiliationXu, Lin; Anhui Normal Universityen
local.contributor.affiliationWang, Ning; Research School of Finance, Actuarial Studies and Statistics, Research School of Finance, Actuarial Studies & Statistics, ANU College of Business & Economics, The Australian National Universityen
local.identifier.pure1e8da340-a6df-4f7a-9afe-cfa46c2342f4en
local.type.statusE-pub ahead of printen

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