IDEAS home Printed from https://ideas.repec.org/a/eej/eeconj/v26y2000i4p431-437.html
   My bibliography  Save this article

Would a Rational Lucy Take Off without Assessing the Probability of a Crash Landing?

Author

Listed:
  • Amnon Levy

    (University of Wollongong)

Abstract

A random life expectancy and a positive relationship between the probability of dying and the degree of addiction are incorporated into a rational addiction model. The Becker-Murphy equality between the addictive commodity's full price and marginal utility is modified by discounting the market price and marginal utility of the addictive commodity by the probability of survival. The individual's negative appreciation of the addictive stock is reinforced by the diminishing survival prospects. The rate of change of the consumption of the addictive commodity is lower than that obtained when the effect of addiction on the probability of dying is ignored.

Suggested Citation

  • Amnon Levy, 2000. "Would a Rational Lucy Take Off without Assessing the Probability of a Crash Landing?," Eastern Economic Journal, Eastern Economic Association, vol. 26(4), pages 431-437, Fall.
  • Handle: RePEc:eej:eeconj:v:26:y:2000:i:4:p:431-437
    as

    Download full text from publisher

    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume26/V26N4P431_437.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Grossman, Michael & Chaloupka, Frank J & Sirtalan, Ismail, 1998. "An Empirical Analysis of Alcohol Addiction: Results from the Monitoring the Future Panels," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 39-48, January.
    2. Chaloupka, Frank, 1991. "Rational Addictive Behavior and Cigarette Smoking," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 722-742, August.
    3. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    4. Olekalns, Nilss & Bardsley, Peter, 1996. "Rational Addiction to Caffeine: An Analysis of Coffee Consumption," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1100-1104, October.
    5. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caputo, Michael R. & Levy, Amnon, 2012. "A theory of mood-influenced consumption and investment in health," Mathematical Social Sciences, Elsevier, vol. 63(3), pages 218-227.

    More about this item

    Keywords

    Addiction; Individual; Utility;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

    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:eej:eeconj:v:26:y:2000:i:4:p:431-437. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross). General contact details of provider: http://edirc.repec.org/data/eeaa1ea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.