What matters in the annuitization decision?

Mohamad Hassan Abou Daya () and Carole Bernard ()
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Mohamad Hassan Abou Daya: Grenoble Ecole de Management
Carole Bernard: Grenoble Ecole de Management

Swiss Journal of Economics and Statistics, 2022, vol. 158, issue 1, 1-12

Abstract: Abstract We perform a simultaneous test for several rational and behavioral factors known to affect the uptake of life annuities in a sample of Americans. We also investigate whether analysts’ short-term stock market expectations affect the decision to annuitize retirement wealth. We find that facing such expectations without trusting them lowers the purchase of annuities. Moreover, we find that individuals who trusted financial analysts’ expectations were less likely to purchase annuities. We attribute these findings to the availability heuristic and present bias, respectively. Finally, we discuss the mediating role of annuity antipathy. Our results provide guidance for policy-makers and annuity providers and offer venues for future research.

Keywords: Annuities demand; Trust in financial analysts; Multiple factors test (search for similar items in EconPapers)
JEL-codes: D12 D83 G11 J14 J26 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1186/s41937-022-00094-4

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