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
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

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • O'Dea, Cormac
  • Sturrock, David
  • Institute for Fiscal Studies (IFS)

Entstanden

  • 2019

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