Time Is More Precious For The Young, Life Is More Valuable For The Old*

Guang-Zhen Sun
Max Planck Institute for Research into Economic Systems, Kahlaische Strasse 10, D-07745 Jena, Germany;
and
Faculty of Social Sciences and Humanities, University of Macau, P.O. Box 3001, Macau
Email: guangzhen_sun@hotmail.com

Yew-Kwang Ng (corresponding)
Department of Economics, Monash University, Clayton Vic. 3800, Australia
Email: kwang.ng@buseco.monash.edu.au

This version: Feb. 2002

Abstract
It is generally believed that life is more valuable for the young as they expect to live longer. It is also generally believed that time is more precious for the middle-aged and the old as they have higher wage-rates and/or have not much time left, making the marginal utility of time high. In this paper, it is shown that results opposite to the above common-sense beliefs may be true. In particular, the marginal utility of time may decrease dramatically with age despite the fact that the wage-rate and the dollar value of time both increase with age, and despite the absence of depreciation in the ability to enjoy life. Moreover, the time value of life (the number of current years one's life is worth) may also increase with age.
JEL Classifications: D91, J17, J20.
Keywords: Value of time; Value of life; Life cycle; Inter-temporal optimization; Age

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