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The contribution of improved joint survival conditions to living standards: an equivalent consumption approach

Listed author(s):
  • Grégory Ponthière

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Individuals care not only about their own survival, but also about the survival of other persons. However, little attention has been paid so far to measuring the contribution of longer coexistence time to living standards. For that purpose, we develop a measure of coexistence time—the joint life expectancy—which quantifies the average duration of existence for a group of persons. Then, using a lifecycle model with risky lifetime, we construct an equivalent consumption measure incorporating gains in single and joint life expectancies. An empirical application to France (1820–2010) shows that, assuming independent individual mortality risks, the rise in joint life expectancies contributed to improve standards of living significantly. We examine the robustness of that result to the introduction of dependent mortality risks using copulas, and we show that equivalent consumption patterns are robust to introducing risk dependence.

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Paper provided by HAL in its series PSE - Labex "OSE-Ouvrir la Science Economique" with number halshs-01313781.

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Date of creation: Feb 2016
Publication status: Published in Social Choice and Welfare, 2016, 46 (2), pp.407-449 <10.1007/s00355-015-0919-y>
Handle: RePEc:hal:pseose:halshs-01313781
DOI: 10.1007/s00355-015-0919-y
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01313781
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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