Wednesday, September 26, 2007

Fasting and Intertemporal Choice.

by Berly

During Ramadhan, the Moslem all over the world withheld from food, drink and sex from sunrise to sunset. There are many research that point out the health and social benefit of this practice, but what drive most people to do it is the quest for the Almighty’s grace and benevolence.

Economists study the choice people made. While some still insist on model of fully self interest agent, some try explain why people behave the way they do. After all, isn't the great Gary S. Becker from University of Chichage that said De Gustibus Non Est Disbutandum (preference/choice is not to be questioned).

If people refrain from consuming certain goods, which bring positive utility in normal times, at certain then it must be because not doing so bring higher utility directly or indirectly (you can bring peer pressure and historical construct if you like) during Ramadhan.

Numerous researches has proven that most people care more about now and present than later. Even if the utility from consuming now is lower than the cost that likely to follow later. This has been one of the strongest explanations of self destructing behavior such as drug addiction, criminal, outside-marriage-pregnancy, etc. Many people are poor calculator of their own well being.

Thus, their utility function (sorry my apology for economists infatuation of making graphical representation out of almost everything, don’t get me start on mathematics) is shape like a hyperbola where the impact of present action get higher weight over the later period. The short hand is hyperbolic discounting.

If fasting work as intended (and robust through time) then the gravity of choice would shift from now to later and from this world to afterworld. People would care not about what good now for themselves but more to what good in the eye of Almighty. Daniel Goleman in his best seller "Emotional Intellegence" pointed out those with willingness and self control to wait for better things are more succesfull in life

When Robert E. Lucas Jr. in his Nobel Prize winning model of rational expectation model proved what ever government do would not matter (policy irrelevant) for a rational and fully informed economic agent, is it possible to extend the model so that for some people the utility function will be strongly anti hyperbolic (help me on this, what is the correct term) so that the present mortal and corporeal world do not matter? In the utmost case only the Almighty does, all else is irrelevant.