Title: To leave or not to leave
Description: "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"--Federal Reserve Board web site.
Subjects: Econometric models, Inheritance and succession, Older people, Personal Finance