Bequest division and population growth: A lineal extinction probability approach |
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Authors: | Huei-Chung Lu Mingshen Chen C Y Cyrus Chu |
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Institution: | (1) Fu-jen Catholic University, Department of Economics, Taipei, Taiwan 242, ROC (Fax: +886-2-23626744; e-mail: ecos1010@mails.fju.edu.tw), TW;(2) National Taiwan University, Department of Finance, Taipei, Taiwan 106, ROC (Fax: +886-2-23626744; e-mail: chen0811@mba.ntu.edu.tw), TW;(3) Academia Sinica, Taipei, Taiwan 115, ROC (Fax: +886-2-27839824; e-mail: cychu@ieas.econ.sinica.edu.tw), TW |
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Abstract: | This study uses a lineal-extinction-probability-minimization approach proposed by Chu (1991) to study the relation between bequest division and population growth. Using a Markov branching process
and “first-degree stochastic dominance” technique, our model's results imply that any specific bequest division, primogeniture
or equal divisions, does not necessarily increase or reduce the population growth by itself. Whether the population does grow,
or by how much, will be determined by the concurrent social-economic conditions. We find that if all family heads faced an
increasing MRTS technology and/or a relatively unfair market chance, then they would tend to choose an unequal division as their optimal bequest policy, and population growth would increase. However, if an equal
division was adopted involuntarily by family heads or was enforced by laws, then the population growth might decline.
Received: 26 November 1999/Accepted: 26 October 2000 |
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Keywords: | JEL classification: D64 K39 J11 |
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