The distribution of wealth and welfare in the presence of incomplete annuity markets

Zvi Eckstein; Martin S. Eichenbaum; Dan Peled

doi:10.2307/1884379

The distribution of wealth and welfare in the presence of incomplete annuity markets

Zvi Eckstein
, Martin S. Eichenbaum
, Dan Peled

Yale University
Carnegie Mellon University

Research output: Contribution to journal › Article › peer-review

24 Scopus citations

Abstract

This paper examines the implications of the absence of complete annuity markets on the distribution of wealth and welfare of agents whose saving decisions are obtained under uncertainty regarding the length of their life. The absence of annuities is shown to yield a unique nondegenerate intragenerational distribution of wealth, which is fully characterized. This characterization is then used to evaluate the Pareto desirability of an annuity system. Alternative welfare criteria that can be used when the proposed change has differential impacts on the initial state of subsequent generations are considered.

Original language	English
Pages (from-to)	789-806
Number of pages	18
Journal	Quarterly Journal of Economics
Volume	100
Issue number	3
DOIs	https://doi.org/10.2307/1884379
State	Published - Aug 1985
Externally published	Yes

Funding

Funders	Funder number
Allan Zelenitz
National Science Foundation	SES-8308575

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

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10.2307/1884379

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title = "The distribution of wealth and welfare in the presence of incomplete annuity markets",

abstract = "This paper examines the implications of the absence of complete annuity markets on the distribution of wealth and welfare of agents whose saving decisions are obtained under uncertainty regarding the length of their life. The absence of annuities is shown to yield a unique nondegenerate intragenerational distribution of wealth, which is fully characterized. This characterization is then used to evaluate the Pareto desirability of an annuity system. Alternative welfare criteria that can be used when the proposed change has differential impacts on the initial state of subsequent generations are considered.",

author = "Zvi Eckstein and Eichenbaum, \{Martin S.\} and Dan Peled",

note = "Funding Information: *A previous version of this paper was presented at the 1982 Summer Meetings of the Econometric Society, Ithaca, New York. We appreciate helpful comments and suggestions from our colleagues, Andrew Abel, Jonathan Eaton, Lars Hansen, Robert Kaplan, Laurence Kotlikoff, Chester Spatt, Robert Townsend, and Allan Zelenitz, and the financial support of the National Science Foundation under grant SES-8308575.",

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The distribution of wealth and welfare in the presence of incomplete annuity markets

Abstract

Funding

UN SDGs

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