Family Economic Behavior: Problems and Prospects

Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita and, thus, with individual consumption, whatever its level is. However, empirical evidence supports a U-shaped relationship between consumption and mortality, implying that the monotonicity of that relation is local but not global. This paper develops a two-period OLG model where life expectancy is a non-monotone function of consumption, and where agents form myopic anticipations about life expectancy. The existence, uniqueness and stability of steady-state equilibria are studied. It is shown that overconsumption equilibria -i.e. equilibria at which consumption exceeds the level maximizing life expectancy -exist in highly productive economies with a low impatience. We identify also conditions under which there exist long-run cycles in output and longevity around overconsumption equilibria.

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Decision Making within the Household

Davis

1976

J CONSUM RES

381

272

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Existing research on household decision making is reviewed in terms of three questions: (1) Which family members are involved in economic decisions? (2) What is the nature of family decision processes? and (3) Are decision outcomes affected by differences in family role structure and decision strategies? Problem areas related to each of these questions are discussed, including an overemphasis on decision roles rather than processes and outcomes, noncomparable and insufficient measures of purchase influence, and marketing's preference for individual-based models of consumer behavior.

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Family Economic Behavior: Problems and Prospects

Cited by 6 publications

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Leere Wiegen Ost

Leere Wiegen Ost

Existence and stability of overconsumption equilibria

Decision Making within the Household

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