IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v54y1978i1p65-71.html
   My bibliography  Save this article

Lifetime Utility Maximization When the Consumer's Lifetime Depends on his Consumption

Author

Listed:
  • W. R. HUGHES

Abstract

A model of consumer behaviour is postulated whereby expected lifetime is an argument of the consumer's utility function and the consumption pattern chosen by the consumer affects his subjective probability distribution over expected, lifetime. Although introducing uncertainty makes the derivation of general conclusions difficult, it is shown for a simple two‐good case that there are significant implications for income and substitution effects and the shape of the consumer's demand curve.

Suggested Citation

  • W. R. Hughes, 1978. "Lifetime Utility Maximization When the Consumer's Lifetime Depends on his Consumption," The Economic Record, The Economic Society of Australia, vol. 54(1), pages 65-71, April.
    • Handle: RePEc:bla:ecorec:v:54:y:1978:i:1:p:65-71
    DOI: 10.1111/j.1475-4932.1978.tb00316.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1978.tb00316.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1978.tb00316.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. A. Sandmo, 1970. "The Effect of Uncertainty on Saving Decisions," Review of Economic Studies, Oxford University Press, vol. 37(3), pages 353-360.
    2. Epstein, L, 1975. "A Disaggregate Analysis of Consumer Choice under Uncertainty," Econometrica, Econometric Society, vol. 43(5-6), pages 877-892, Sept.-Nov.
    3. Hayne E. Leland, 1968. "Saving and Uncertainty: The Precautionary Demand for Saving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(3), pages 465-473.
    4. Dreze, Jacques H. & Modigliani, Franco, 1972. "Consumption decisions under uncertainty," Journal of Economic Theory, Elsevier, vol. 5(3), pages 308-335, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Flodén, 2006. "Labour Supply and Saving Under Uncertainty," Economic Journal, Royal Economic Society, vol. 116(513), pages 721-737, July.
    2. Mark Huggett, 2004. "Precautionary Wealth Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(3), pages 769-781.
    3. Barsky, Robert B & Mankiw, N Gregory & Zeldes, Stephen P, 1986. "Ricardian Consumers with Keynesian Propensities," American Economic Review, American Economic Association, vol. 76(4), pages 676-691, September.
    4. Donatella Baiardi & Marco Magnani & Mario Menegatti, 2014. "Precautionary saving under many risks," Journal of Economics, Springer, vol. 113(3), pages 211-228, November.
    5. Guillermo Cruces, 2005. "Income Fluctuations, Poverty and Well-Being Over Time: Theory and Application to Argentina," Labor and Demography 0502007, University Library of Munich, Germany.
    6. Clemens, Christiane & Soretz, Susanne, 1999. "Konsequenzen des Zins- und Einkommensrisikos auf das wirtschaftliche Wachstum," Hannover Economic Papers (HEP) dp-221, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    7. Hauenschild, Nils & Stahlecker, Peter, 2001. "Precautionary saving and fuzzy information," Economics Letters, Elsevier, vol. 70(1), pages 107-114, January.
    8. Chou, Shin-Yi & Liu, Jin-Tan & Hammitt, James K., 2003. "National Health Insurance and precautionary saving: evidence from Taiwan," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1873-1894, September.
    9. Cary Deck & Harris Schlesinger, 2014. "Consistency of Higher Order Risk Preferences," Econometrica, Econometric Society, vol. 82, pages 1913-1943, September.
    10. Alba Lugilde & Roberto Bande & Dolores Riveiro, 2018. "Precautionary saving in Spain during the great recession: evidence from a panel of uncertainty indicators," Review of Economics of the Household, Springer, vol. 16(4), pages 1151-1179, December.
    11. Aj A Bostian & Christoph Heinzel, 2020. "Robustness of Inferences in Risk and Time Experiments to Lifecycle Asset Integration," Post-Print hal-03358620, HAL.
    12. Huggett, Mark & Ospina, Sandra, 2001. "Aggregate precautionary savings: when is the third derivative irrelevant?," Journal of Monetary Economics, Elsevier, vol. 48(2), pages 373-396, October.
    13. Ghosh, Atish R. & Ostry, Jonathan D., 1997. "Macroeconomic uncertainty, precautionary saving, and the current account," Journal of Monetary Economics, Elsevier, vol. 40(1), pages 121-139, September.
    14. Alain Chateauneuf & Ghizlane Lakhnati & Eric Langlais, 2016. "On the precautionary motive for savings and prudence in the rank-dependent utility framework," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 169-182, January.
    15. Chen, Kevin Z. & D. Meilke, Karl & Turvey, Calum, 1999. "Income risk and farm consumption behavior," Agricultural Economics, Blackwell, vol. 20(2), pages 173-183, March.
    16. White, Lucy, 2008. "Prudence in bargaining: The effect of uncertainty on bargaining outcomes," Games and Economic Behavior, Elsevier, vol. 62(1), pages 211-231, January.
    17. Jouini, Elyès & Napp, Clotilde & Nocetti, Diego, 2013. "On multivariate prudence," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1255-1267.
    18. Kimball, Miles S, 1993. "Standard Risk Aversion," Econometrica, Econometric Society, vol. 61(3), pages 589-611, May.
    19. Heinzel Christoph & Richard Peter, 2021. "Precautionary motives with multiple instruments," Working Papers SMART 21-09, INRAE UMR SMART.
    20. Michel Denuit & Louis Eeckhoudt, 2016. "Risk aversion, prudence, and asset allocation: a review and some new developments," Theory and Decision, Springer, vol. 80(2), pages 227-243, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:54:y:1978:i:1:p:65-71. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.