By Stark O.
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Ut 3 i1 iÀ1 u cti Y 2X3 where ` 1 is the individual's discount factor and uH c b 0 and uHH c 0 Vc ! 0Y u 0 b ÀIX 2X4 Thus u X R 3 R is strictly monotonic increasing, concave, and bounded from below. Furthermore, it satis®es the expected utility axioms. In the ®rst period of their lifetime (youth), individuals of generation t are endowed with a unit of labor but with no land. Individuals allocate their unit endowment of labor between work in the nonfarm sector at the competitive market wage w and investment in human capital.
Proof: See appendix. Corollary: Consider a world that consists of countries which are identical in all respects except for the life expectancy of their populations. 8), the per capita income is higher in countries in which life expectancy is longer. A2), aggregate as well as per capita output in the nonfarm sector increase with life expectancy. The aggregate output in the farm sector is constant, however, given the constant supply of land. Furthermore, since an increase in life expectancy increases the number of individuals in the economy at any point in time, in per capita terms the output in the farm sector decreases with life expectancy.
The derivatives would then describe the effects on wellbeing of varying one's marriage partner. Note that by substituting genetic fitness for utility (see Becker ), Wilson's (1975) argument that altruism reduces personal fitness may not only be vindicated but broadened: altruism may actually reduce group fitness. 5 It is useful to check how general is the result that with utility interdependence, a rise in altruism that leads to consumption transfers could make the transferring party worse off.
Altruism and beyond by Stark O.
Categories: History Theory