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Demand For Life Annuities From Married Couples With A Bequest Motive

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Author Info

  • CARLOS VIDAL-MELIA

    (University of Valencia Spain)

  • ANA LEJÁRRAGA-GARCÍA

    (University of Valencia Spain)

Abstract

This paper will try to explain the “annuities puzzle” in greater depth by introducing the bequest motive, both strategic and altruistic. It will try to determine whether this motive really is a relevant feature influencing the demand for lifetime annuities by married couples. With this aim in mind, we develop an optimization model of the utility provided by purchasing a lifetime annuity with contingent survivor benefit or a joint survivor life annuity. This will enable us to calculate equivalent wealth in various contexts: the possibility of access to actuarially fair annuity markets, the inclusion of so-called market imperfections, and the assumption that couples already have part of their wealth in pre-existing lifetime annuities. Results are presented for a model specification calibrated to Spain.

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File URL: http://128.118.178.162/eps/pe/papers/0409/0409009.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0409009.

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Length: 22 pages
Date of creation: 13 Sep 2004
Date of revision:
Handle: RePEc:wpa:wuwppe:0409009

Note: Type of Document - pdf; pages: 22
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Web page: http://128.118.178.162

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Keywords: Capitalization; Pension Funds; Retirement; Utility.;

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Cited by:
  1. José M. Labeaga & Ester Martínez Ros, . "Persistence and ability in the innovation decisions," Working Papers 2005-16, FEDEA.
  2. Federica Teppa, 2011. "Can the Longevity Risk Alleviate the Annuitization Puzzle? Empirical Evidence from Dutch Data," DNB Working Papers 302, Netherlands Central Bank, Research Department.
  3. Pedro N. Rodríguez, & Simón Sosvilla-Rivero, 2006. "Understanding and Forecasting Stock Price Changes," Working Papers 2006-03, FEDEA.
  4. Corinne Mette, . "Wellbeing and dependency among European elderly: The role of social integration," Working Papers 2005-12, FEDEA.
  5. Federica Teppa, 2011. "Can the longevity risk alleviate The annuitization puzzle? Empirical evidence from Dutch data," Working Papers 223, ECINEQ, Society for the Study of Economic Inequality.
  6. Andrés J. Marchante Mera & Bienvenido Ortega Aguaza & José Sánchez Maldonado, 2006. "Las dimensiones del bienestar en las Comunidades Autónomas Españolas. Un análisis de Sigma y Gamma-Convergencia," Working Papers 2006-05, FEDEA.
  7. José M. Labeaga & Xisco Oliver & Amedeo Spadaro, . "Measuring Changes in Health Capital," Working Papers 2005-15, FEDEA.

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