Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73101
Authors: 
Strulik, Holger
Year of Publication: 
2011
Series/Report no.: 
Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät, Universität Hannover 488
Abstract: 
This note extends the theory of optimal aging and death (Dalgaard and Strulik, 2010) towards uncertain death. Specifically, it is assumed that at any age the probability to survive depends on the number of health deficits accumulated. It is shown that the results in Dalgaard and Strulik (2011) on the foundation of the Preston curve (the association between income and life-expectancy across countries) are robust against this extension. While results virtually coincide at high income levels, the stochastic version predicts somewhat more curvature of the Preston curve at low income levels. Taking uncertain death and a precautionary motive for health investment into account thus further improves a bit the anyway good fit of the Preston curve.
Subjects: 
Aging
Longevity
Health
Savings
Preston Curve
JEL: 
D91
J17
J26
I12
Document Type: 
Working Paper

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