Do aspirations reduce differences in wealth accumulation?

Jordi Caballe () and Ana Moro-Egido

Economic Modelling, 2021, vol. 102, issue C

Abstract: We propose aspirations as a mechanism that allows reconciling the standard theoretical result stating that altruistic individuals accumulate more wealth than non-altruistic individuals with the empirical evidence showing that bequest motivated and non-bequest motivated individuals behave similarly concerning wealth accumulation. In particular, we show that although introducing aspirations at different ages displays different effects on wealth accumulation, both adult and old aspirations reduce the positive effect on wealth accumulation brought about by the bequest motive. Thus, bequest and non-bequest motivated individuals exhibit similar patterns of wealth accumulation, which also results in a decrease in the inequality caused by bequests. As a by-product of our analysis, we show that the introduction of aspirations raises the speed of convergence to the dynastic steady state.

Keywords: Aspirations; Saving; Bequests; Wealth accumulation (search for similar items in EconPapers)
JEL-codes: D31 D9 E21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999321001425
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:102:y:2021:i:c:s0264999321001425

DOI: 10.1016/j.econmod.2021.105553

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().