Arbeitspapier
Survival pessimism and the demand for annuities
The "annuity puzzle" refers to the fact that annuities are rarely purchased despite the longevity insurance they provide. Most explanations for this puzzle assume that individuals have accurate expectations about their future survival. We provide evidence that individuals mis-perceive their mortality risk, and study the demand for annuities in a setting where annuities are priced by insurers on the basis of objectively-measured survival probabilities but in which individuals make purchasing decisions based on their own subjective survival probabilities. Subjective expectations have the capacity to explain signi cant rates of non-annuitization, yielding a quantitatively important explanation for the annuities puzzle.
- Sprache
-
Englisch
- Erschienen in
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Series: IFS Working Papers ; No. W19/02
- Klassifikation
-
Wirtschaft
Household Saving; Personal Finance
Expectations; Speculations
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- Thema
-
Annuity Puzzle
Subjective Expectations
Survival Probabilities
- Ereignis
-
Geistige Schöpfung
- (wer)
-
O'Dea, Cormac
Sturrock, David
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for Fiscal Studies (IFS)
- (wo)
-
London
- (wann)
-
2019
- DOI
-
doi:10.1920/wp.ifs.2019.0219
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- O'Dea, Cormac
- Sturrock, David
- Institute for Fiscal Studies (IFS)
Entstanden
- 2019