Monday, November 20, 2006

The birth rate equation.

Birth rate has been to ultimate concern in most develope country and not to leave out...our beloved mini country called singapore!...i am not saying we are developed but we are facing that problem.

Anyway.it is such a huge problem because with a decline birth rate which could ultimately leading to a declining population will ultimatly decrease the potential output the economy is able to produce...unless the country keep getting people to come into its country...no country can sustain having birth rates declining continously!. However, its not possible to have immigrants flowing in infinitely..there will be a problem of patrotism..which is hard to cultivate in a immigrant. not saying its impossible...but harder.

Anyway lets look at the problem mathematically... First we look at what contributes to birt rate...or whats the direct relationship it has with other factors. For my entire life minus the day i was born till just now i have been doing research on what factors contribute to birth rate...and i realise there are too many factors so i am going to leave out the least important one...and make a logical assumption as to the leading and main factor that is relate to birth rate would be s-e-x.

Thus s-e-x would be a function of birth rate...Br=ß(s).. where Br stands for birth rate and ß stands for the sensitivity of s-e-x to birth rate [eg. doing it 10 times might hit jackpot] and (S) is therefore = to s-e-x.

however by assuming only s-e-x is the ONLY factor, i will have to stop typing this post and thus...it will not make this post very interesting thus..i will have to include another factor into the equation that is Income.

Now the assumption of income is that, the higher income an individual gets, the more time and effort have to be sacrifice. so the trade off is leisure vs. work. And this assumption can be backed by data and poor people tend to have more children then richer folks. now lets continue and add this factor into the above equation.

Br= ß(s) - â(Y/F) Y=income, F=fun, Y/F=work [ higher fun, lower work and higher income higher work], â = sensitivity of work to birth rate.

Now with this new equation we will have a better understanding and can see that, With a higher income Br will decrease due to an negavtive relationship it has. However we can't just stop here. We must now look at what the underlying factors that affect income and one of that is income taxes. Thus with tax and income having an inverse relationship, meaning decrease in tax will increase in income and vice versa. (y=-t). By applying this known fact into the Br equation, we will be able to see that an increase in tax rate will indirectly increase the Br.

So we have kinda solve the reason or infact we provided another reason for the govt to increase the tax rate in order to save the economy as a whole. We are blessed to have a govt that think really far ahead.

And i shall stop my theory of birth rate here, kinda down with a flu but just thought i need to get this idea down before it evaporate into some part of my brain which is unused.