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Subjective survival probabilities and life tables: Evidence from Europe

Author

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  • Franco Peracchi

    (Tor Vergata University and EIEF)

  • Valeria Perotti

    (The World Bank)

Abstract

Understanding the variability of survival probabilities, both between and within cohorts, is important to economists who study life-cycle decisions under uncertainty. In this paper we analyze the subjective probabilities of survival to specific target ages provided by respondents to the Survey of Health, Ageing and Retirement in Europe (SHARE). To evaluate how these probabilities compare with objective data from life tables, and avoid the problems associated with a naive use of period life tables, we construct cohort life tables from the sequence of period life tables available in the Human Mortality Database and use them to compute actuarial probabilities of survival to the same target ages. We find that male subjective survival probabilities are close to the probabilities computed from the cohort life tables, whereas female subjective probabilities are always lower. We also find that subjective survival probabilities are on average higher for more educated people, those whose household income is higher, and those with better health. This evidence suggests that both income and health matter for own assessments of subjective survival.

Suggested Citation

  • Franco Peracchi & Valeria Perotti, 2010. "Subjective survival probabilities and life tables: Evidence from Europe," EIEF Working Papers Series 1016, Einaudi Institute for Economics and Finance (EIEF), revised Nov 2011.
  • Handle: RePEc:eie:wpaper:1016
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    1. Adeline Delavande & Susann Rohwedder, 2008. "Differential Mortality in Europe and the U.S. Estimates Based on Subjective Probabilities of Survival," Working Papers 613, RAND Corporation.
    2. Franco Peracchi & Claudio Rossetti, 2009. "Gender and regional differences in self-rated health in Europe," CEIS Research Paper 142, Tor Vergata University, CEIS, revised 30 Sep 2009.
    3. Agar Brugiavini & Tullio Jappelli & Guglielmo Weber, 2002. "The Survey on Health, Aging and Wealth," CSEF Working Papers 86, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. J. Dominitz & C. F. Manski, "undated". "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.
    5. Alexander Ludwig & Alexander Zimper, 2008. "A Parsimonious Choquet Model of Subjective Life Expectancy," Working Papers, Center for Retirement Research at Boston College wp2008-20, Center for Retirement Research, revised Dec 2008.
    6. S. Balia, 2007. "Reporting expected longevity and smoking: evidence from the SHARE," Working Paper CRENoS 200705, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    7. repec:crr:issbrf:ib2007-7-9 is not listed on IDEAS
    8. Manski, Charles F. & Molinari, Francesca, 2010. "Rounding Probabilistic Expectations in Surveys," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(2), pages 219-231.
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    Cited by:

    1. BOUCKAERT, Nicolas & SCHOKKAERT, Erik, 2013. "Differing types of medical prevention appeal to different individuals," CORE Discussion Papers 2013038, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Grevenbrock, Nils & Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2015. "Biased Survival Beliefs, Psychological and Cognitive Explanations, and the Demand for Life Insurances," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113203, Verein für Socialpolitik / German Economic Association.
    3. L. Bissonnette & J. de Bresser, 2018. "Eliciting Subjective Survival Curves: Lessons from Partial Identification," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 36(3), pages 505-515, July.
    4. Nicolas Bouckaert & Erik Schokkaert, 2016. "Differing types of medical prevention appeal to different individuals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(3), pages 317-337, April.
    5. Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2013. "Ambiguous Survival Beliefs and Hyperbolic Discounting in a Life-Cycle Model," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79878, Verein für Socialpolitik / German Economic Association.
    6. Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2016. "A life-cycle model with ambiguous survival beliefs," Journal of Economic Theory, Elsevier, vol. 162(C), pages 137-180.
    7. Grevenbrock, Nils & Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2018. "Cognition, Optimism and the Formation of Age-Dependent Survival Beliefs," MEA discussion paper series 201801, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    8. S. Balia, 2011. "Survival expectations, subjective health and smoking: evidence from European countries," Health, Econometrics and Data Group (HEDG) Working Papers 11/30, HEDG, c/o Department of Economics, University of York.
    9. Frank Cowell & Brian Nolan & Javier Olivera & Philippe Van Kerm, 2017. "Wealth, Top Incomes and Inequality," LWS Working papers 24, LIS Cross-National Data Center in Luxembourg.
    10. Olivera, Javier, 2019. "The distribution of pension wealth in Europe," The Journal of the Economics of Ageing, Elsevier, vol. 13(C), pages 30-42.
    11. Angelini, Viola & Cavapozzi, Danilo, 2017. "Dispositional optimism and stock investments," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 113-128.
    12. Alexander Zimper & Alexander Ludwig & Max Groneck, 2012. "A Life-Cycle Consumption Model with Ambiguous Survival Beliefs," 2012 Meeting Papers 693, Society for Economic Dynamics.
    13. David R. Rappange & Werner B. F. Brouwer & Job van Exel, 2016. "A long life in good health: subjective expectations regarding length and future health-related quality of life," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(5), pages 577-589, June.
    14. Vesile Kutlu-Koc & Adriaan Kalwij, 2017. "Individual Survival Expectations and Actual Mortality: Evidence from Dutch Survey and Administrative Data," European Journal of Population, Springer;European Association for Population Studies, vol. 33(4), pages 509-532, October.
    15. Apostolos Papachristos & Georgia Verropoulou & George B. Ploubidis & Cleon Tsimbos, 2020. "Factors incorporated into future survival estimation among Europeans," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(2), pages 15-56.
    16. Brigitte Dormont & Anne-Laure Samson & Marc Fleurbaey & Stéphane Luchini & Erik Schokkaert, 2018. "Individual Uncertainty About Longevity," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1829-1854, October.
    17. Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2019. "Who Saves More, the Naive or the Sophisticated Agent?," SAFE Working Paper Series 169, Leibniz Institute for Financial Research SAFE.
    18. Silvia Balia, 2014. "Survival expectations, subjective health and smoking: evidence from SHARE," Empirical Economics, Springer, vol. 47(2), pages 753-780, September.
    19. Dimiter Philipov & Sergei Scherbov, 2020. "Subjective length of life of European individuals at older ages: Temporal and gender distinctions," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-14, March.

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