Longevity risk, subjective survival expectations, and individual saving behavior
Thomas Post and
Katja Hanewald
Journal of Economic Behavior & Organization, 2013, vol. 86, issue C, 200-220
Abstract:
We provide evidence of individuals’ awareness of longevity risk (the uncertainty about future survival probabilities) based on subjective survival expectations elicited in the Survey of Health, Ageing and Retirement in Europe (SHARE) and matching data on longevity risk from the Human Mortality Database. We find a positive relationship between the forecast dispersion in subjective survival estimates and longevity risk which indicates that individuals are to some extent aware of longevity risk. Our analysis of savings behavior shows that the dispersion in survival estimates is primarily explained by individuals disagreeing on the survival probability and not by their true awareness of the underlying uncertainty. Individuals do not save more on average when faced with longevity risk although theory suggests they should.
Keywords: Longevity risk; Subjective survival expectations; Forecast dispersion; Saving behavior (search for similar items in EconPapers)
JEL-codes: D14 D84 D91 H31 J11 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (36)
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Working Paper: Longevity Risk, Subjective Survival Expectations, and Individual Saving Behavior (2011) 
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:86:y:2013:i:c:p:200-220
DOI: 10.1016/j.jebo.2012.11.012
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