Time Preference and Life Cycle Consumption with Endogenous Survival

We provide a structural theory of time preference and derive a functional form of intertemporal preferences by postulating that individuals make their life‐cycle consumption choices as if to maximize expected lifetime. This yields a nontime‐separable expected utility representation where the inverse of the coefficient of intertemporal substitution exceeds the coefficient of relative risk aversion. The rate of time preference depends on the …