Subjective mortality hazard shocks and the adjustment of consumption expenditures

Anikó Bíró

Journal of Population Economics, 2013, vol. 26, issue 4, 1379-1408

Abstract: I estimate the effect of shocks to subjective mortality hazards on consumption expenditures of retired individuals using the Survey of Health, Ageing and Retirement in Europe. I measure mortality expectations with survey responses on survival probabilities. To create plausibly exogenous variation in mortality hazard, I use the death of a sibling as an instrument. My results show that survey responses contain economically relevant information about longevity expectations and confirm the predictions of life-cycle theories about the effect of these expectations on intertemporal choice. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Consumption decisions; Subjective longevity; IV estimation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s00148-012-0461-5

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