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Stability of Preference against Aging and Health Shocks: A comparison between Japan and the United States

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  • Hideki HASHIMOTO
  • Hidehiko ICHIMURA
  • Satoshi SHIMIZUTANI

Abstract

This study explores stability of preference against aging and health shocks. Contrary to a vast amount of literature assuming that risk attitude is unchanged over time, we utilize JSTAR (Japanese Study of Aging and Retirement), which provides longitudinal data on the middle aged and elderly comparable with the Health and Retirement Study (HRS)/English Longitudinal Study of Ageing (ELSA)/Survey of Health, Ageing and Retirement in Europe (SHARE), to examine how aging and past health experiences systematically affect risk attitude. We find that while there is empirical evidence that aging gradually causes individuals to be more risk averse, health shocks do not seem to affect risk preference systematically.

Suggested Citation

  • Hideki HASHIMOTO & Hidehiko ICHIMURA & Satoshi SHIMIZUTANI, 2013. "Stability of Preference against Aging and Health Shocks: A comparison between Japan and the United States," Discussion papers 13068, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:13068
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    References listed on IDEAS

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    5. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 729-758.
    6. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    7. Gabriel Picone & Frank Sloan & Donald Taylor, 2004. "Effects of Risk and Time Preference and Expected Longevity on Demand for Medical Tests," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 39-53, January.
    8. Moreira, Bruno & Matsushita, Raul & Da Silva, Sergio, 2010. "Risk seeking behavior of preschool children in a gambling task," Journal of Economic Psychology, Elsevier, vol. 31(5), pages 794-801, October.
    9. Louise Sheiner & David N. Weil, 1992. "The Housing Wealth of the Aged," NBER Working Papers 4115, National Bureau of Economic Research, Inc.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. #HEJC papers for September 2013
      by academichealtheconomists in The Academic Health Economists' Blog on 2013-09-01 04:01:38

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    Cited by:

    1. Rieger, Matthias, 2015. "Risk aversion, time preference and health production: Theory and empirical evidence from Cambodia," Economics & Human Biology, Elsevier, vol. 17(C), pages 1-15.

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