Evidence on Individual Preferences for Longevity Risk

Gaëtan Delprat (), Marie-Louise Leroux and Pierre-Carl Michaud
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Gaëtan Delprat: University of Québec at Montréal

No 7317, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The standard model of intertemporal choice assumes risk neutrality toward the length of life: due to additivity, agents are not sensitive to a mean preserving spread in the length of life. Using a survey fielded in the RAND American Life Panel (ALP), this paper provides empirical evidence on possible deviation from risk neutrality with respect to longevity in the U.S. population. The questions we ask allow to find the distribution as well as to quantify the degree of risk aversion with respect to the length of life in the population. We find evidence that roughly 75% of respondents were not neutral with respect to longevity risk. Higher income households are more likely to be risk averse. We do not find evidence that the degree of risk aversion varies with age or education.

Keywords: risk aversion toward the length of life; intertemporal choice; stated-preference (search for similar items in EconPapers)
JEL-codes: D12 D91 I10 J26 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2013-03
New Economics Papers: this item is included in nep-age, nep-dem, nep-hea and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Evidence on individual preferences for longevity risk* (2016)
Working Paper: Evidence on Individual Preferences for Longevity Risks (2016)
Working Paper: Evidence on Individual Preferences for Longevity Risk (2013)
Working Paper: Evidence on Individual Preferences for Longevity Risk (2013)
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