Denial of Death and Economic Behavior

Wojciech Kopczuk and Joel Slemrod

No 11485, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model denial of death and its effect on economic behavior. Attempts to reduce death anxiety and the possibility of denial of mortality-relevant information interact with intertemporal choices and may lead to time-inconsistent behavior and other "behavioral" phenomena. In the model, repression of signals of mortality leads to underconsumption for unsophisticated individuals, but forward-sophisticated individuals may over-consume in anticipation of future denial and may seek ways to commit to act according to one's mortality prospects as currently perceived. We show that the mere possibility of engaging in this kind of denial leads to time-inconsistent but efficient behavior. Refusal to face up to the reality of death may help explain a wide range of empirical phenomena, including the underutilization of tax-advanced inter vivos gifts and inadequate purchase of life insurance.

JEL-codes: D11 D81 D91 (search for similar items in EconPapers)
Date: 2005-07
New Economics Papers: this item is included in nep-evo, nep-hea and nep-mic
Note: AG AP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

Published as Advances in Theoretical Economics, 2005: Vol. 5: No. 1, Article 5.
Published as Wojciech Kopczuk & Joel Slemrod, 2005. "Denial of Death and Economic Behavior," The B.E. Journal of Theoretical Economics, Berkeley Electronic Press, vol. 0(1), pages 5.

Downloads: (external link)
http://www.nber.org/papers/w11485.pdf (application/pdf)

Related works:
Journal Article: Denial of Death and Economic Behavior (2005)
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:nbr:nberwo:11485

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11485

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().