Reference : Life-cycle modelling of bequests and its implications for annuity valuation
Scientific journals : Article
Business & economic sciences : Economic systems & public economics
http://hdl.handle.net/2268/17674
Life-cycle modelling of bequests and its implications for annuity valuation
English
Jousten, Alain mailto [Université de Liège - ULg > HEC-Ecole de gestion de l'ULg : UER > Théorie monétaire et macroéconomie >]
2001
Journal of Public Economics
Elsevier Science
79
149-177
Yes (verified by ORBi)
International
0047-2727
Lausanne
Switzerland
[en] bequests ; annuities ; consumption function
[en] In this paper we introduce a linear bequest motive into a standard life-cycle model, both
allowing for credit and annuity market imperfections. First, we characterize the consumption
and wealth processes.We find that consumption is non-increasing in the linear bequest
parameter for the simplest certainty case, but that the same is not true for life-span
uncertainty. Second, we study the issue of annuity valuation. For a sufficiently strong
bequest motive, the true value of an annuity is equal to the actuarial value. This invalidates
a previous claim that, for imperfect annuity markets, it is close to the simple financial value.
Researchers ; Professionals
http://hdl.handle.net/2268/17674

There is no file associated with this reference.

Bookmark and Share SFX Query

All documents in ORBi are protected by a user license.