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Given the paucity of publicly available data on the very wealthy, it is not surprising that the economic literature contains almost no empirical studies that shed any light on the behavior of the childless wealthy elderly (although there have been several studies that have examined the behavior of поп-wealthy childless elderly households, and have found that they do not dissave; see, e.g., Menchik and David (1983) and the references therein). I was able to find only one study that contains even tangential information on the subject, a paper by Auten and Joulfaian (1996) which uses a proprietary dataset compiled by the Internal Revenue Service on 1982 decedents who paid estate taxes. From figures in their Table 1, p. 62 it is possible to calculate that the mean wealth of the childless decedents was virtually identical to that of those with children – hardly what would be expected if those with children had a powerful dynastic saving motive which the childless (presumably) do not share. Furthermore, those with children actually contributed slightly more to charity during their lifetimes than the childless. Again, a dynastic motive would suggest the opposite. Finally, Auten and Joulfaian found no significant effect of children’s income on the size of charitable bequests. This finding is consistent with evidence by Wilhelm (1996) who found little support for the altruism model’s implication that the size of bequests in families with more than one child should be related to the relative lifetime income of the children. Instead, Wilhelm found roughly equal bequests in about 80 percent of bequests.


The Capitalist Spirit
This section presents a model in which wealth enters consumers’ utility functions directly, and argues that such a model is both consistent with the available data on the saving behavior of the wealthy and plausible on grounds other than its consistency with these facts. Zou (1994) and Bakshi and Chen (1996) have recently noted that Max Weber (1958) long ago argued that the pursuit of wealth for its own sake was the ‘spirit of capitalism,5 and so I will call this the ‘Capitalist Spirit’ model.

The Model

Consider a consumer with lifetime wealth Wt. Suppose the utility function for lifetime consumption is a standard CRRA utility function, u(ct) = and suppose the consumer also obtains utility from wealth in a modified Stone-Geary form, v(wt) =
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The problem as described thus far can be interpreted in either of two ways. The first interpretation is that the model describes a consumer deciding how to allocate lifetime resources between consumption and wealth, with wealth yielding utility directly. The second interpretation is of a consumer deciding how to allocate lifetime resources between lifetime consumption and end-of-lifetime wealth. (The reasons end-of-period wealth might yield utility include the “Joy of Giving” bequest motive mentioned above, and several others. See below for further discussion).