Death is an integral part of life. Yet the economic modeling of death is perfunctory, with most of the controversy focused on whether people's planning horizon ends with their own life or extends beyond that. In contrast, one might expect that, of all aspects of life, decisions that require facing up to one's own mortality engender unique fears and psychological reactions.1 That we are forwardlooking and can anticipate death distinguishes human beings from other species. Sigmund Freud's student Otto Rank (1941) argued that mortality anxiety was the fundamental human fear, and he attributed the genesis of man's religious impulses and the source of humanity's construction of meaning and order to the awareness of one's personal finitude. Rank's ideas were revived and popularized in Ernest Becker's (1973) book The Denial of Death. The idea that many people live in denial of their own mortality is common in literature and philosophy, perhaps best summarized in the words of the 17th-century French epigrammist Francois La Rochefoucauld: One cannot look directly at either the sun or Many central issues in economics, such as the intertemporal pattern of consumption, are at stake if people systematically deviate from the predictions of standard models with regard to decisions concerning their own death. Assessing whether this is true requires enriching the models of how people behave in the face of death and testing them against observed patterns of behavior.

This paper examines data from U.S. federal tax returns to shed light on whether the timing of death is responsive to its tax consequences. We investigate the temporal pattern of deaths around the time of changes in the estate-tax system periods when living longer, or dying sooner, could significantly affect estate-tax liability. We find some evidence that there is a small death elasticity, although we cannot rule out that what we have uncovered is ex post doctoring of the reported date of death.

Charitable Bequests and Taxes on Inheritances and Estates: Aggregate Evidence from across States and Time by Jon M. Bakija, William G. Gale and Joel B. Slemrod. Published in volume 93, issue 2, pages 366-370 of American Economic Review, May 2003

Many households received income tax rebates in 2001 of $300 or $600. These rebates represented advance payments of the tax cut from the new 10 percent tax bracket. Based on a survey of a representative sample of households, this paper finds that only 22 percent of households receiving the rebate would spent it. Instead, they would either save it or use it to pay off debt. This very low rate of spending represents a striking break with past behavior, which would have suggested a much higher rate of spending. The low spending rate implies that the tax rebate provided a very limited stimulus to aggregate demand.