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Individual Survival Curves Comparing Subjective and Observed Mortality Risks

Author

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  • Bissonnette, Luc

    () (Laval University)

  • Hurd, Michael D.

    () (RAND)

  • Michaud, Pierre-Carl

    () (HEC Montreal)

Abstract

In this paper, we compare individual survival curves constructed from objective (actual mortality) and elicited subjective information (probability of survival to a given target age). We develop a methodology to estimate jointly subjective and objective individual-survival curves accounting for rounding on subjective reports of perceived mortality risk. We make use of the long follow-up period in the Health and Retirement Study and the high quality of mortality data to estimate individual survival curves which feature both observed and unobserved heterogeneity. This allows us to compare objective and subjective estimates of remaining life expectancy for various groups, evaluate subjective expectations of joint survival and widowhood by household, and compare objective and subjective mortality with standard life-cycle models of consumption.

Suggested Citation

  • Bissonnette, Luc & Hurd, Michael D. & Michaud, Pierre-Carl, 2014. "Individual Survival Curves Comparing Subjective and Observed Mortality Risks," IZA Discussion Papers 8658, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8658
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    References listed on IDEAS

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    Cited by:

    1. Cormac O'Dea & David Sturrock, 2019. "Survival pessimism and the demand for annuities," IFS Working Papers W19/02, Institute for Fiscal Studies.
    2. 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.
    3. 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.
    4. 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.
    5. de Bresser, Jochem, 2019. "Measuring subjective survival expectations – Do response scales matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 136-156.
    6. Teresa Bago d'Uva & Esen Erdogan Ciftci & Owen O'Donnell & Eddy van Doorslaer, 2015. "Who can predict their Own Demise? Accuracy of Longevity Expectations by Education and Cognition," Tinbergen Institute Discussion Papers 15-052/V, Tinbergen Institute.
    7. 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.
    8. Cormac O'Dea & David Sturrock, 2018. "Subjective expectations of survival and economic behaviour," IFS Working Papers W18/14, Institute for Fiscal Studies.
    9. Sanna Nivakoski, 2020. "Wealth and the effect of subjective survival probability," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 633-670, April.
    10. Weinert, Jan-Hendrik & Gründl, Helmut, 2016. "The modern tontine: An innovative instrument for longevity risk management in an aging society," ICIR Working Paper Series 22/16, Goethe University Frankfurt, International Center for Insurance Regulation (ICIR).
    11. OLIVERA Javier, 2018. "The distribution of pension wealth in Europe," LISER Working Paper Series 2018-10, LISER.
    12. Federica Teppa & Susan Thorp & Hazel Bateman, 2015. "Family, friends and framing: A cross-country study of subjective survival expectations," DNB Working Papers 491, Netherlands Central Bank, Research Department.
    13. 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.
    14. 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.

    More about this item

    Keywords

    subjective probabilities; old age mortality; joint survival of couples;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • I10 - Health, Education, and Welfare - - Health - - - General

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