Optimal Aging with Uncertain Death

Center for European Governance and Economic Development Research, Number 160, June 2013

19 Pages Posted: 25 Jun 2013 Last revised: 2 Jul 2013

See all articles by Holger Strulik

Holger Strulik

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences

Date Written: June 24, 2013

Abstract

This paper extends the theory of optimal aging and death (Dalgaard and Strulik, 2010, 2013) towards uncertain death. Specifically, it is assumed that at any age the probability to survive depends on the number of health deficits accumulated. At the expense of less analytical tractability the model provides a formal description of aging as conceptualized in modern biology, i.e. as an inherently stochastic process according to which the timing of death of a person is not determined by his or her age but by the number of accumulated health deficits. The stochastic model basically con rms the earlier deterministic model with respect to its predictions on the association between income and life-expectancy across countries.

Keywords: Aging, Longevity, Health, Savings, Preston Curve

JEL Classification: D91, J17, J26, I12

Suggested Citation

Strulik, Holger, Optimal Aging with Uncertain Death (June 24, 2013). Center for European Governance and Economic Development Research, Number 160, June 2013, Available at SSRN: https://ssrn.com/abstract=2284343 or http://dx.doi.org/10.2139/ssrn.2284343

Holger Strulik (Contact Author)

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences ( email )

Germany

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