Subjective mortality expectations and consumption and saving behaviours among the elderly

Martin Salm

Canadian Journal of Economics, 2010, vol. 43, issue 3, 1040-1057

Abstract: Life expectancy is an important factor that individuals have to take into account for saving and consumption choices. The life-cycle model of consumption and saving behaviour predicts that consumption growth should decrease with higher mortality rates. The aim of this study is to test this hypothesis based on data about subjective longevity expectations from the Health and Retirement Study merged with detailed consumption data from two waves of the Consumption and Activities Mail Survey. This study finds that an increase in subjective mortality by 1% corresponds to an annual decrease in consumption of non-durable goods of around 1.8%.

JEL-codes: D81 D91 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (58)

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