1,721,305 research outputs found
Hooked on weight control: An economic theory of anorexia nervosa and its impact on health and longevity
No full textPreferences, income, and life satisfaction: An equivalence result
No full textIn this paper I investigate the nexus between life time utility (life satisfaction) and income predicted by the standard model of endogenous economic growth under different behavioral assumptions. The solution rationalizes why the empirical association between income and life satisfaction is approximately log-linear. I show that the solution is observationally equivalent when individuals compare their consumption (i) with others, (ii) with their own past consumption achievements, and (iii) not at all (ordinary preferences). This finding suggests that the observed slope of the income life satisfaction curve is uninformative about the presence and strength of habits or reference-dependent utility. (C) 2015 Elsevier B.V. All rights reserved
Limited Self-Control and Long-Run Growth
No full textThis paper integrates imperfect self-control into the standard model of endogenous growth. In their long-run savings decisions individuals take into account a cost of self-control, which depends on the consumption temptations of their impatient short-run self. I obtain a closed-form solution for consumption and show that within a certain range of self-control an investment subsidy can be useful in order to reduce consumption and to increase investment, growth, and welfare of the long-run self. A consumption tax, perhaps surprisingly, is found to be counterproductive. It induces individuals with limited self-control to consume even more
An economic theory of religious belief
Full text linkIn this paper I consider how individuals allocate their time between church attendance (and other religious activities) and secular leisure activities. Moreover individuals use a cognitive style, which is either intuitive-believing or reflective-analytical. I assume that the full benefit from religious activities is achieved by intuitive believers. The model predicts that, ceteris paribus, wealthier individuals and individuals with higher cognitive ability are more likely to abandon the intuitive-believing cognitive style. They may continue to attend church but do so less frequently than intuitive believers. In general equilibrium, there exists a locally stable steady state where believing and frequent church attendance is widespread across the social strata. A sufficiently large negative shock (e.g. the Enlightenment, repeal of Sunday shopping laws), however, initiates the gradual secularization of society
Hyperbolic discounting and endogenous growth
No full textThis paper provides the closed form solution for the standard model of endogenous growth when consumers have present-biased preferences and make time-inconsistent savings plans, which they revise continuously. It is shown that long-run growth is not necessarily lower under present-biased preferences. In fact, a strong equivalence result holds. If hyperbolic discounting provides the same present value of a constant infinite income stream as standard exponential discounting, then the equilibrium rate of economic growth is also the same under both discounting methods. In this sense present-bias preferences are harmless for economic growth. (C) 2014 Elsevier B.V. All rights reserved
The voracity effect revisited
No full textIn an influential article Tornell and Lane (1999) considered an economy, populated by multiple powerful groups, in which property rights in the formal sector are not protected. They argued that then investment in an informal sector may be optimal and set up conditions for "voracity" such that a permanent positive shock in the formal sector leads to lower economic growth. Here I show that whenever investing in the informal sector is feasible, not investing in the informal sector is a Pareto-superior Nash equilibrium under the mild condition of an elasticity of intertemporal substitution in consumption smaller than unity. As a corollary, voracity disappears. (c) 2012 Elsevier B.V. All rights reserved
From Pain Patient to Junkie: An Economic Theory of Painkiller Consumption and its Impact on Wellbeing and Longevity
No full textSCHOOL ATTENDANCE AND CHILD LABOR-A MODEL OF COLLECTIVE BEHAVIOR
No full textThis paper investigates how community attitudes affect school attendance and child labor and how aggregate behavior of the community feeds back on the formation of schooling attitudes. The theory takes aggregate and idiosyncratic poverty into account as an important driver of absence from school and provides an explanation for why equally poor villages or regions can display very different attitudes towards schooling. Distinguishing between three modes of child time allocation, school attendance, work, and leisure, the paper shows how child labor productivity and the time costs of schooling contribute to the existence of a locally stable antischooling norm and how policy can exploit social dynamics and help a community to escape permanently from low attendance at school and child labor
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