Survival misperception, time inconsistency, and implications for life-cycle saving and welfare

Some empirical studies firmly reveal that people tend to form overly pessimistic survival expectations for relatively less distant ages and overly optimistic survival expectations for relatively more distant ages. We incorporate this observation into a life-cycle continuous time overlapping-generations model of consumption/saving with a general form for a subjective survival function. Resulting time-inconsistent optimal control problem has been analytically solved. At the micro level, time inconsistency leads to higher consumption at young and old ages, but this alone fails to improve lifetime well-being since micro-level decisions made with a lack of information about true mortality are suboptimal. In general equilibrium, however, such time inconsistent behavior with survival misperception is conducive to aggregate capital accumulation and greater equilibrium bequest income. The latter effects can produce substantial welfare gains. We also note that empirically observed old age optimistic bias is an important phenomenon, as it helps to avoid unrealistic very old-age debt accumulation within a life-cycle model. In addition, if for a given level of optimistic bias we increase early-life pessimism, this would result in slower capital accumulation, lower bequest income, and thus be detrimental to welfare. Since recent literature reports that young-age survival pessimism has grown over time, it raises some concerns.

Demo abstract: wind measurements for water quality studies in urban reservoirs

Water quality monitoring and prediction are critical for ensuring the sustainability of water resources which are essential for social security, especially for countries with limited land like Singapore. For example, the Singapore government identified water as a new growth sector and committed in 2006 to invest S$ 330 million over the following five years for water research and development [1]. To investigate the water quality evolution numerically, some key water quality parameters at several discrete locations in the reservoir (e.g., dissolved oxygen, chlorophyll, and temperature) and some environmental parameters (e.g., the wind distribution above water surface, air temperature and precipitation) are used as inputs to a three-dimensional hydrodynamics-ecological model, Estuary Lake and Coastal Ocean Model - Computational Aquatic Ecosystem Dynamics Model (ELCOM-CAEDYM) [2]. Based on the calculation in the model, we can obtain the distribution of water quality in the whole reservoir. We can also study the effect of different environmental parameters on the water quality evolution, and finally predict the water quality of the reservoir with a time step of 30 seconds. In this demo, we introduce our data collection system which enables water quality studies with real-time sensor data.