To leave or not to leave: the distribution of bequest motives

Wojciech Kopczuk and Joseph Lupton ()

No 2004-33, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In this paper, 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 70 percent of the elderly single population has a bequest motive that may or may not be active depending on the level of resources at a given age. Both the presence and the magnitude of the bequest motive are statistically and economically significant. All else being equal, households with an operative bequest motive spend between $4,000 and $9,000 a year less on consumption expenditures on average. We conclude that, among the elderly single households in our sample, approximately half of bequeathed wealth will be due to a bequest motive.

Keywords: Inheritance; and; succession (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-acc
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: To Leave or Not to Leave: The Distribution of Bequest Motives (2007)
Working Paper: To Leave or Not To Leave: The Distribution of Bequest Motives (2005)
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