How will a risk of income fluctuations influence the suicidal decision making? Insights from a three-period model of suicide

A risk of income fluctuations has two opposite impacts on the decision-making of those who contemplate suicide due to economic difficulties. First, an increase in this risk makes risk-averse people more likely to commit suicide by reducing their expected utility. Second, the increased risk makes them less likely to commit suicide by creating a value to waiting for their economic environment to improve. Standard models typically ignore the latter of the two impacts, however. In this paper, I allow the agents in the model to delay the action of committing suicide. From a series of simulations, I derive four conclusions. First, it is misleading to ignore the agents’ ability to wait when they are endowed with no debts. Second, the young who are endowed with no debts may choose to stay alive only to commit suicide in near future when their income is at high risk of fluctuations. Third, the young who are endowed with debts cannot utilise the ability to wait at all. Fourth, the divorced, ceteris paribus, are more likely to commit suicide than the married. Copyright Eurasia Business and Economics Society 2015