Accession Number : AD0749900

Title :   Optimal Consumption with a Stochastic Income Stream,

Corporate Author : CALIFORNIA UNIV LOS ANGELES WESTERN MANAGEMENT SCIENCE INST

Personal Author(s) : Miller,Bruce L.

Report Date : APR 1972

Pagination or Media Count : 28

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)

Descriptors :   (*ECONOMICS, DECISION THEORY), SALARIES, MONEY, STOCHASTIC PROCESSES, MATHEMATICAL MODELS, RANDOM VARIABLES, DYNAMIC PROGRAMMING, OPTIMIZATION

Subject Categories : Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE