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Subjective Health Expectations

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  • Juergen Jung

    (Indiana University Bloomington)

Abstract

In this paper, I derive subjective health expectations curves using the RAND-HRS data. These curves can be used in the estimation of structural life-cycle models. I first construct "health tables" from the RAND-HRS data and update subjective health expectations with information from these tables. The Bayesian updating mechanism corrects for focal point responses and reporting errors of the original health expectations variable. In addition, I test the quality of the health expectations measure and describe its correlation with various health indicators and other individual characteristics. I find that subjective health expectations do contain additional information that is not incorporated in subjective mortality expectations and that the rational expectations assumption cannot be rejected for subjective health expectations.

Suggested Citation

  • Juergen Jung, 2008. "Subjective Health Expectations," CAEPR Working Papers 2008-016, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
  • Handle: RePEc:inu:caeprp:2008016
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    References listed on IDEAS

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    Cited by:

    1. Robin L. Lumsdaine & Rogier J.D. Potter van Loon, 2013. "Wall Street vs. Main Street: An Evaluation of Probabilities," NBER Working Papers 19103, National Bureau of Economic Research, Inc.
    2. Juerg Schweri, 2021. "Predicting polytomous career choices in healthcare using probabilistic expectations data," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 544-563, March.
    3. Kuo-Liang Chang & George Langelett & Andrew Waugh, 2011. "Health, Health Insurance, and Decision to Exit from Farming," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 356-372, June.
    4. Aylit Tina Romm, 2014. "An interpretation of focal point responses as non-additive beliefs," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 9(5), pages 387-402, September.

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    More about this item

    Keywords

    Subjective Health Expectations; Health Expectations; Bayesian Updating of Expectations;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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