info document - Paris School of Economics

Figure 9: Percentage of Lifetime Net Earnings Willing to Pay to Live in the US25DenPercentage of Lifetime Earnings2015105GerFinSweNetFraUK0US10 20 30 40 50 60 70 80 90 100Ability Percentilewhere n ∗ and i ∗ are given by the solution to the problem below(c ∗ , n ∗ , i ∗ , a ′∗ (ɛ ′ )) = arg maxc,n,i,a ′ (ɛ ′ )s.t.(1 + ¯τ c )c + ∑ ɛ ′ q(ɛ ′ | ɛ)a ′ (ɛ ′ ) = (1 − ¯τ n (y))y + a + T ry = [ɛ(P L l + P H h)(1 − i)]n[u(c, n) + β ∑ ɛ ′ Π(ɛ ′ | ɛ)V (ɛ ′ , a ′ (ɛ ′ ), h ′ , m + 1; s + 1)h ′ = (1 − δ)h + A([θ H h + θ L l]ni) α , l ′ = (1 − δ)li ∈ [0, χ]]31