Life-cycle consumption and hyperbolic discount functions Export

@article{citeulike:2202174, abstract = {Studies of animal and human behavior suggest that discount functions are approximately hyperbolic (Ainslie, Picoeconomics, 1992). Hyperbolic models explain a wide range of empirical anomalies including (1) missing precautionary savings effects, (2) incongruence between the elasticity of intertemporal substitution and the inverse of the coefficient of relative risk aversion, (3) consumption discontinuities at retirement, (4) variation in patience over the life cycle, (5) consumer self-reports of `undersaving', (6) disproportionate retirement accumulation in illiquid assets, (7) asset-specific marginal propensities to consume, and (8) declining national savings rates in developed countries. Hyperbolic models also provide a new framework for analyzing the welfare gains that come from pro-saving policies like social security and tax-deferred retirement accounts.}, author = {Laibson, David}, citeulike-article-id = {2202174}, citeulike-linkout-0 = {http://dx.doi.org/10.1016/S0014-2921(97)00132-3}, citeulike-linkout-1 = {http://www.sciencedirect.com/science/article/B6V64-3VKKB1K-16/2/cb55340b54b0b43f347a24f2a83bf7ee}, day = {31}, doi = {10.1016/S0014-2921(97)00132-3}, journal = {European Economic Review}, keywords = {buffer-stock, consumption, dynamic, euler-equation, hyperbolic-discounting, inconsistency, savings, time-preference}, month = {May}, number = {3-5}, pages = {861--871}, posted-at = {2008-01-07 06:54:19}, priority = {2}, title = {Life-cycle consumption and hyperbolic discount functions}, url = {http://dx.doi.org/10.1016/S0014-2921(97)00132-3}, volume = {42}, year = {1998} }

TY - JOUR ID - citeulike:2202174 L3 - citeulike-article-id:2202174 N2 - Studies of animal and human behavior suggest that discount functions are approximately hyperbolic (Ainslie, Picoeconomics, 1992). Hyperbolic models explain a wide range of empirical anomalies including (1) missing precautionary savings effects, (2) incongruence between the elasticity of intertemporal substitution and the inverse of the coefficient of relative risk aversion, (3) consumption discontinuities at retirement, (4) variation in patience over the life cycle, (5) consumer self-reports of `undersaving', (6) disproportionate retirement accumulation in illiquid assets, (7) asset-specific marginal propensities to consume, and (8) declining national savings rates in developed countries. Hyperbolic models also provide a new framework for analyzing the welfare gains that come from pro-saving policies like social security and tax-deferred retirement accounts. IS - 3-5 JF - European Economic Review EP - 871 TI - Life-cycle consumption and hyperbolic discount functions VL - 42 SP - 861 KW - buffer-stock KW - consumption KW - dynamic KW - euler-equation KW - hyperbolic-discounting KW - inconsistency KW - savings KW - time-preference AU - Laibson, David PY - 1998/05/31/ UR - http://dx.doi.org/10.1016/S0014-2921(97)00132-3 ER -