Optimal Aging with Uncertain Death
AbstractThis note extends the theory of optimal aging and death (Dalgaard and Strulik, 2010) towards uncertain death. Specifically, it is assumed that at any age the probability to survive depends on the number of health deficits accumulated. It is shown that the results in Dalgaard and Strulik (2011) on the foundation of the Preston curve (the association between income and life-expectancy across countries) are robust against this extension. While results virtually coincide at high income levels, the stochastic version predicts somewhat more curvature of the Preston curve at low income levels. Taking uncertain death and a precautionary motive for health investment into account thus further improves a bit the anyway good fit of the Preston curve.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-488.
Length: 11 pages
Date of creation: Dec 2011
Date of revision:
Aging; Longevity; Health; Savings; Preston Curve;
Other versions of this item:
- Strulik, Holger, 2013. "Optimal aging with uncertain death," Center for European, Governance and Economic Development Research Discussion Papers 160, University of Goettingen, Department of Economics.
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- I12 - Health, Education, and Welfare - - Health - - - Health Production
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-01-18 (Economics of Ageing)
- NEP-ALL-2012-01-18 (All new papers)
- NEP-HEA-2012-01-18 (Health Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eytan Sheshinski, 2007. "The Economic Theory of Annuities," Economics Books, Princeton University Press, edition 1, volume 1, number 8536.
- Heijdra, Ben J. & Romp, Ward E., 2005.
"A Life-Cycle Overlapping-Generations Model of the Small Open Economy,"
05C04, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Ben J. Heijdra & Ward E. Romp, 2008. "A life-cycle overlapping-generations model of the small open economy," Oxford Economic Papers, Oxford University Press, vol. 60(1), pages 88-121, January.
- Holger Strulik & Sebastian Vollmer, 2011.
"Long-Run Trends of Human Aging and Longevity,"
PGDA Working Papers
7311, Program on the Global Demography of Aging.
- Carl-Johan Dalgaard & Holger Strulik, 2010. "Optimal Aging and Death," PGDA Working Papers 5810, Program on the Global Demography of Aging.
- Carl-Johan Dalgaard & Holger Strulik, 2012. "The Genesis of the Golden Age - Accounting for the Rise in Health and Leisure," Discussion Papers 12-10, University of Copenhagen. Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Heidrich, Christian).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.