IDEAS home Printed from
   My bibliography  Save this article

Uncertain Lifetime And Intertemporal Choice: Risk Aversion As A Rationale For Time Discounting


  • Antoine Bommier


This article makes explicit the links between preferences over lotteries on length of life and intertemporal choice. It shows that the approach used by traditional life cycle models to account for uncertain survival corresponds to a strong assumption of risk neutrality with respect to length of life. Relaxing such an assumption leads us to develop a more general formulation of lifetime utility in which time discounting is directly related to preferences over length of life. Exponential and hyperbolic discounting are found to result, in a first approximation, from constant and hyperbolic risk aversion with respect to length of life. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Antoine Bommier, 2006. "Uncertain Lifetime And Intertemporal Choice: Risk Aversion As A Rationale For Time Discounting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(4), pages 1223-1246, November.
  • Handle: RePEc:ier:iecrev:v:47:y:2006:i:4:p:1223-1246

    Download full text from publisher

    File URL:
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. Amy Farmer & Jill Tiefenthaler, 1997. "An Economic Analysis of Domestic Violence," Review of Social Economy, Taylor & Francis Journals, vol. 55(3), pages 337-358.
    3. Sara Markowitz, 2000. "The Price of Alcohol, Wife Abuse, and Husband Abuse," Southern Economic Journal, Southern Economic Association, vol. 67(2), pages 279-303, July.
    4. Van den Berg, G J & Lindeboom, M & Ridder, G, 1994. "Attrition in Longitudinal Panel Data and the Empirical Analysis of Dynamic Labour Market Behaviour," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(4), pages 421-435, Oct.-Dec..
    5. Robert A. Pollak, 2004. "An intergenerational model of domestic violence," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(2), pages 311-329, June.
    6. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    7. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
    8. Zvi Eckstein & Kenneth I. Wolpin, 1989. "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience," Review of Economic Studies, Oxford University Press, vol. 56(3), pages 375-390.
    9. Bartel, Ann & Taubman, Paul, 1979. "Health and Labor Market Success: The Role of Various Diseases," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 1-8, February.
    10. JoAnn Kingston-Riechers, 2001. "The association between the frequency of wife assault and marital dissolution in Canada," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(2), pages 351-365.
    11. Chirikos, Thomas N & Nestel, Gilbert, 1985. "Further Evidence on the Economic Effects of Poor Health," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 61-69, February.
    12. Tauchen, Helen V & Witte, Ann Dryden & Long, Sharon K, 1991. "Domestic Violence: A Nonrandom Affair," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(2), pages 491-511, May.
    13. Johnson, William R & Skinner, Jonathan, 1986. "Labor Supply and Marital Separation," American Economic Review, American Economic Association, vol. 76(3), pages 455-469, June.
    14. Shannon N. Seitz, 1999. "Labor Supply, Divorce and Remarriage," UWO Department of Economics Working Papers 9902, University of Western Ontario, Department of Economics.
    15. Susan Lloyd, "undated". "The Effects of Violence on Women's Employment," IPR working papers 97-4, Institute for Policy Resarch at Northwestern University.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    17. Helen V. Tauchen & Ann Dryden Witte & Sharon K. Long, 1985. "Domestic Violence: A Non-random Affair," NBER Working Papers 1665, National Bureau of Economic Research, Inc.
    18. Bartel, Ann & Taubman, Paul, 1986. "Some Economic and Demographic Consequences of Mental Illness," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 243-256, April.
    19. Susan Lloyd, 1997. "The Effects of Violence on Women's Employment," JCPR Working Papers 6, Northwestern University/University of Chicago Joint Center for Poverty Research.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income


    Access and download statistics


    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:ier:iecrev:v:47:y:2006:i:4:p:1223-1246. 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: (Wiley-Blackwell Digital Licensing) or (). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.