Precise or Imprecise Probabilities? Evidence from Survey Response on Late-onset Dementia

Pamela Giustinelli, Charles Manski and Francesca Molinari

No 26125, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We elicit numerical expectations for late-onset dementia in the Health and Retirement Study. Our elicitation distinguishes between precise and imprecise probabilities, while accounting for rounding of reports. Respondents quantify imprecision using probability intervals. Nearly half of respondents hold imprecise dementia probabilities, while almost a third of precise-probability respondents round their reports. We provide the first empirical evidence on dementia-risk perceptions among dementia-free older Americans and novel evidence about imprecise probabilities in a nationally-representative sample. We show, in a specific framework, that failing to account for imprecise or rounded probabilities can yield incorrect predictions of long-term care insurance purchase decisions.

JEL-codes: D80 D84 I0 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
Note: AG EH
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Published as Pamela Giustinelli & Charles F Manski & Francesca Molinari, 2022. "Precise or Imprecise Probabilities? Evidence from Survey Response Related to Late-Onset Dementia," Journal of the European Economic Association, vol 20(1), pages 187-221.

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