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Subjective mortality hazard shocks and the adjustment of consumption expenditures

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  • Anikó Bíró

Abstract

I estimate the effect of shocks to subjective mortality hazards on consumption expenditures of retired individuals using the Survey of Health, Ageing and Retirement in Europe. I measure mortality expectations with survey responses on survival probabilities. To create plausibly exogenous variation in mortality hazard, I use the death of a sibling as an instrument. My results show that survey responses contain economically relevant information about longevity expectations and confirm the predictions of life-cycle theories about the effect of these expectations on intertemporal choice. Copyright Springer-Verlag Berlin Heidelberg 2013

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  • Anikó Bíró, 2013. "Subjective mortality hazard shocks and the adjustment of consumption expenditures," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1379-1408, October.
    • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1379-1408
    DOI: 10.1007/s00148-012-0461-5
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