Optimal Consumption with a Stochastic Income Stream,
Abstract
The paper investigates the optimal consumption strategies of an individual facing a stochastic labor and deterministic capital income stream over an infinite horizon. The main result of the paper is a theorem showing that the optimal amount to consume in the stochastic income case is always less than the optimal amount to consume in the deterministic case where the stochastic income received each period is replaced by its mean. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1972
- Accession Number
- AD0749900
Entities
People
- Bruce L. Miller
Organizations
- University of California, Los Angeles