Optimal Aging and Death: Understanding the Preston Curve
AbstractThe present study examines whether the Preston curve reflects a causal impact of income on longevity or, for example, factors correlated with both income and life expectancy. In order to understand the Preston curve better, we develop a model of optimal intertemporal consumption in which the representative consumer is subject to physiological aging. In modeling aging we draw on recent research in the fields of biology and medicine. The speed of the aging process, and thus the time of death, are endogenously determined by optimal health investments. We calibrate the model to US data and proceed to show that the model accounts for nearly 80% of the cross-country differences in life expectancy that the Preston curve captures.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 11-09.
Length: 30 pages
Date of creation: Jul 2010
Date of revision: Mar 2011
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More information through EDIRC
aging; longevity; health investments; savings; Preston curve;
Find related papers by JEL classification:
- 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-2011-03-19 (Economics of Ageing)
- NEP-ALL-2011-03-19 (All new papers)
- NEP-EVO-2011-03-19 (Evolutionary Economics)
- NEP-HEA-2011-03-19 (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.:
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Elsevier, vol. 22(C), pages 70-79.
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- Jean-Yves DUCLOS & Bouba HOUSSEINI, 2013. "Life quantity, life quality and longevity: An intertemporal social evaluation framework," Working Papers P79, FERDI.
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