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Stochastic Mortality, Subjective Survival Expectations, and Individual Saving Behavior

  • Thomas Post
  • Katja Hanewald

Theoretical studies suggest that unexpected changes in future mortality and survival probabilities (stochastic mortality) are important determinants of individuals’ decisions about consumption, saving, asset allocation, and retirement timing. Using data on subjective survival expectations elicited in the Survey of Health, Ageing and Retirement in Europe (SHARE) and corresponding life table data from the Human Mortality Database (HMD), we find evidence of respondents’ awareness of stochastic mortality. We also find that respondents’ saving behavior is influenced by stochastic mortality perceptions.

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Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2010-040.

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Length: 34 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2010-040
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