This paper introduces consumption externalities into a Ramsey-type model with endogenous labour supply and homogeneous agents. The instantaneous utility of any consumer is assumed to depend on work effort, own consumption and relative consumption, where the latter determines the individual's...

We find a U-shaped relation between happiness and religiosity in cross-country panel data after controlling for income levels. At a given level of income, the same level of happiness can be reached with high and low levels of religiosity, but not with intermediate levels. A rise in income causes...

We find a U-shaped relation between happiness and religiosity in cross-country panel data after controlling for income levels. At a given level of income, the same level of happiness can be reached with high and low levels of religiosity, but not with intermediate levels. A rise in income causes...

If the marginal utility of consumption depends on health status, this will affect the economic analysis of a number of central problems in public finance, including the optimal structure of health insurance and optimal life cycle savings. In this paper, we describe the promises and challenges of...

For many people "solidarity" has become a meaningless word used in slogans - too often used without leading to any economic consequences. We show in this paper conditions under which solidarity can be a powerful instrument. In a solidary action, an individual in a group contributes to a series...

We show that if an agent is uncertain about the precise form of his utility function, his actual relative risk aversion may depend on wealth even if he knows his utility function lies in the class of constant relative risk aversion (CRRA) utility functions. We illustrate the consequences of this...

In the perpetual youth overlapping-generations model of Blanchard and Yaari, if leisure is a normal good then some agents will have negative labour supply. We suggest a solution to this problem by using a modified version of Greenwood, Hercowitz and Huffman's utility function. The modification...

This paper deals with utility (or value) function for reference dependent models. A new characterization of S-shaped utility functions displaying loss aversion is put forward. Then it is used to analyze some standard forms commonly used in the literature. It is shown that, unless some...