Evaluation of Subjective Probability Distributions in the HRS

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Evaluation of Subjective Probability Distributions in the HRS

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Michael D. Hurd
Kathleen McGarry

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Michael D. Hurd

Abstract

In the Health and Retirement Survey respondents were asked about the chances they would live to 75 or to 85, and the chances they would work after age 62 or 65. We analyze the responses to determine if they behave like probabilities, if their averages are close to average probabilities in the population, and if they have correlations with other variables that are similar to correlations with actual outcomes. We find that generally they do behave like probabilities and they do aggregate. Most remarkable, however, is that they covary with other variables in the same way actual outcomes vary with the variables. For example, smokers give lower probabilities of living to 75 than nonsmokers. We conclude that these measures of subjective probabilities have great potential use in models of intertemporal decision making under uncertainty.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4560.

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Date of creation: Dec 1993
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Handle: RePEc:nbr:nberwo:4560

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Find related papers by JEL classification:
J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped
J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends and Forecasts

References listed on IDEAS
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Michael D. Hurd, 1993. "The Effect of Labor Market Rigidities on the Labor Force Behavior of Older Workers," NBER Working Papers 4462, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

J. Dominitz & C. F. Manski, . "Perceptions of economic vulnerability: First evidence from the survey of economic expectations," Institute for Research on Poverty Discussion Papers 1069-95, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
O. Attanasio & H. W. Hoynes, . "Differential mortality and wealth accumulation," Institute for Research on Poverty Discussion Papers 1079-96, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
Other versions:
- Orazio P. Attanasio & Hilary W. Hoynes, 1995. "Differential Mortality and Wealth Accumulation," NBER Working Papers 5126, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Jeff Dominitz & Charles F. Manski, 1994. "Using Expectations Data to Study Subjective Income Expectations," NBER Working Papers 4937, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Jeff Dominitz & Charles F. Manski, 1994. "Using Expectations Data to Study Subjective Income Expectations," Econometrics 9411003, EconWPA. [Downloadable!]
- J. Dominitz & C. F. Manski, . "Using expectations data to study subjective income expectations," Institute for Research on Poverty Discussion Papers 1050-94, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
Tullio Jappelli & Mario Padula & Renata Bottazzi, 2003. "Retirement Expectations and Pension Reforms," CSEF Working Papers 92, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
Shelly J. Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Working Papers wp004, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
Other versions:
- Shelly J. Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Econometric Society World Congress 2000 Contributed Papers 1414, Econometric Society. [Downloadable!]
- Shelly Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Discussion Papers in Economics at the University of Washington 0026, Department of Economics at the University of Washington. [Downloadable!]
- Shelly Lundberg & Jennifer Ward-Batts, 2000. "Saving for Retirement: Household Bargaining and Household Net Worth," Working Papers 0026, University of Washington, Department of Economics. [Downloadable!]
Guan Gong & Anthony Webb, 2006. "Mortality Heterogeneity and The Distributional Consequences of Mandatory Annuitization," Working Papers, Center for Retirement Research at Boston College wp2006-11, Center for Retirement Research, revised Jun 2006. [Downloadable!]
Paul Contoyannis and Andrea M Jones, . "Socioeconomic Status, Health and Lifestyle," Discussion Papers 01/19, Department of Economics, University of York. [Downloadable!]
Other versions:
- Contoyannis, Paul & Jones, Andrew M., 2004. "Socio-economic status, health and lifestyle," Journal of Health Economics, Elsevier, vol. 23(5), pages 965-995, September. [Downloadable!] (restricted)
Li Gan & Michael Hurd & Daniel McFadden, 2003. "Individual Subjective Survival Curves," NBER Working Papers 9480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Li Gan & Michael D. Hurd & Daniel L. McFadden, 2005. "Individual Subjective Survival Curves," NBER Chapters, in: Analyses in the Economics of Aging, pages 377-412 National Bureau of Economic Research, Inc. [Downloadable!]
John Cawley & Tomas Philipson, 1996. "An Empirical Examination of Information Barriers to Trade in Insurance," NBER Working Papers 5669, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- John Cawley & Tomas Philipson, 1997. "An Empirical Examination of Information Barriers to Trade inInsurance," University of Chicago - George G. Stigler Center for Study of Economy and State 132, Chicago - Center for Study of Economy and State.
- John Cawley & Tomas Philipson, 1999. "An Empirical Examination of Information Barriers to Trade in Insurance," American Economic Review, American Economic Association, vol. 89(4), pages 827-846, September. [Downloadable!] (restricted)

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