At each age an organism produces energy by foraging and allocates this energy among reproduction, survival, growth, and intergenerational transfers. We characterize the optimal set of allocation decisions that maximizes reproductive fitness. Time preference (the discount rate) is derived from the marginal rate of substitution between energy obtained at two different times or ages in an individual’s life, holding reproductive fitness constant. We show that the life history may have an initial immature phase during which there is body growth but no fertility, and a later mature phase with fertility but no growth, as with humans. During the immature phase, time preference depends only on the compounding effect of body growth, much like returns on a capital investment, but not on fertility, or the intrinsic population growth rate. During the mature phase, time preference depends on the costliness of fertility, and on endogenous survival and intrinsic growth rate, and not at all on body growth. During the transition between the two phases, fertility, mortality, body growth, and intrinsic growth rate all matter. Using these results, we conclude that time preference and discount rates are likely to be U-shaped across age. We compare our results to Hansson and Stuart (1990), Rogers (1994, 1997) and Sozou and Seymour (2003). Wastage and inefficiencies aside, in a single sex model a system of intergenerational transfers yields Samuelson’s (1958) biological interest rate equal to the population growth rate. When the rate of time preference exceeds this biological rate, inter- generational transfers will raise fitness and evolve through natural selection, partially smoothing out the age variations in time preference.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
14185.
Length: Date of creation: Jul 2008 Date of revision: Handle: RePEc:nbr:nberwo:14185
Note: AG Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: J1 - Labor and Demographic Economics - - Demographic Economics
This paper has been announced in the following NEP Reports:
References listed on IDEAS 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.:
Cited by: (explanations, 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.)