Subjective mortality hazard shocks and the adjustment of consumption expenditures
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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Volume (Year): 26 (2013)
Issue (Month): 4 (October)
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