Subjective Life Expectancies, Time Preference Heterogeneity, and Wealth Inequality

Richard Foltyn and Jonna Olsson

Working Papers from Business School - Economics, University of Glasgow

Abstract: This paper explores how heterogeneity in life expectancy, objective (statistical) as well as subjective, affects savings behavior between healthy and unhealthy people. Using data from the Health and Retirement Study, we show that people in poor health not only have shorter actual lifespan, but are also more pessimistic about their remaining time of life. Using a standard overlapping-generations model, we show that differences in life expectancy can explain one third of the differences in accumulated wealth with an important part driven by pessimism among unhealthy people.

Keywords: Life expectancy; preference heterogeneity; subjective beliefs; life cycle (search for similar items in EconPapers)
JEL-codes: D15 E21 G41 I14 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-hea, nep-isf and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.gla.ac.uk/media/Media_804526_smxx.pdf (application/pdf)

Related works:
Journal Article: Subjective life expectancies, time preference heterogeneity, and wealth inequality (2024)
Working Paper: Subjective Life Expectancies, Time Preference Heterogeneity, and Wealth Inequality (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2021_13

Access Statistics for this paper

More papers in Working Papers from Business School - Economics, University of Glasgow Contact information at EDIRC.
Bibliographic data for series maintained by Business School Research Team ().