Journal Article

To Leave or Not to Leave: The Distribution of Bequest Motives

Wojciech Kopczuk and Joseph P. Lupton

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 74, issue 1, pages 207-235
Published in print January 2007 | ISSN: 0034-6527
Published online January 2007 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/j.1467-937X.2007.00419.x
To Leave or Not to Leave: The Distribution of Bequest Motives

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  • Welfare Economics
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We examine the effect of observed and unobserved heterogeneity in the desire to die with positive net worth. Using a structural life-cycle model nested in a switching regression with unknown sample separation, we find that roughly three-fourths of the elderly single population has abequest motive. Both the presence and the magnitude of the bequest motive are statistically and economically significant. On average, households with a bequest motive spend about 25% less on consumption expenditures. We conclude that, among the elderly single households in our sample, about four-fifths of their net wealth will be bequeathed and approximately half of this is due to a bequest motive.

Keywords: D64; D91

Journal Article.  15398 words.  Illustrated.

Subjects: Welfare Economics ; Intertemporal Choice and Growth

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