power utility, or isoelastic utility, is a financial econometric is a utility that results absolute, constant relative risk aversion. i.e.: you tell me how risk averse you are exogenously, I tell you how much utility some consumption is. constituents some relative risk coefficient \gamma \in (0,1), higher more risk averse consumption of some asset C requirements Utility U( C) is defined by:
\begin{equation} U( C) = \frac{c^{1-\gamma}-1}{1-\gamma} \end{equation}
additional information As you can see, the higher \gamma, the lower utility some consumption brings. log utility log utility is a special case of power utility whereby:
\begin{equation} U(x) = \log x \end{equation}
which converges to power utility where \lambda \to 1.