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Cognition, Optimism and the Formation of Age-Dependent Survival Beliefs

Author

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  • Grevenbrock, Nils
  • Groneck, Max
  • Ludwig, Alexander

    ()

  • Zimper, Alexander

    (Munich Center for the Economics of Aging (MEA))

Abstract

[English] This paper investigates the roles psychological biases play in deviations between subjective survival beliefs (SSBs) and objective survival probabilities (OSPs). We model deviations between SSBs and OSPs through age-dependent inverse S-shaped probability weighting functions. Our estimates suggest that implied measures for cognitive weakness and relative pessimism increase with age. We document that direct measures of cognitive weakness and motivational attitudes share these trends. Our regression analyses confirm that these factors play strong quantitative roles in the formation of subjective survival beliefs: cognitive weakness rather than optimism is an increasingly important contributor to overestimation of survival chances in old age. [German] Diese Arbeit ist motiviert durch die klassische ökonomische Frage, wie Entscheidungen über den Lebenszyklus von zeitlichen Präferenzen und dem Zeithorizont der Individuen beeinflusst werden. Insbesondere fokussieren wir darauf, wie Individuen ihre Überlebenserwartungen bilden. Zufolge zahlreicher empirischer Studien unterschätzen junge Menschen ihre Überlebenschancen, wohingegen ältere Menschen diese durchschnittlich überschätzen. Was ist die treibende Kraft hinter diesem altersabhängigen Muster der Fehleinschätzungen der ferneren Lebenserwartungen? Gibt es womöglich Effekte, die über einen Lern- und Erfahrungsprozess über Gesundheitsrisiken und -historien hinaus die Einschätzung von Individuen hinsichtlich dieses Risikos beeinflussen? Dieses Paper erörtert, dass psychologische Faktoren von entscheidender Bedeutung zur Beantwortung dieser Frage sind. Wir vergleichen subjektive Überlebenserwartungen aus einer Haushaltsbefragung mit den dazu korrespondierenden objektiven Überlebenswahrscheinlichkeiten, die wir basierend auf individuellen Charakteristika schätzen (z.B. Alter, Geschlecht, Gesundheitshistorie). Wir dokumentieren, dass typische Verzerrungen auftreten: Bis zu einem Alter von 70 Jahren unterschätzen Individuen ihre objektiven Überlebenschancen, ab diesem Alter überschätzen sie diese. Um zu zeigen, dass psychologische Einstellungen wichtige Determinanten dieser Abweichungen zwischen subjektiven Überlebenserwartungen und objektiven Überlebenswahrscheinlichkeiten sind, schätzen wir implizite psychologische Faktoren aus den beobachteten Differenzen. Wir zeigen, dass das implizite Maß sowohl an gemessenem Pessimismus, als auch an Insensitivität zur objektiven Wahrscheinlichkeit, mit dem Alter steigt. Diese Ergebnisse legen also nahe, dass Individuen im Durchschnitt im Alter pessimistischer werden und dass die Fähigkeit, objektive Wahrscheinlichkeiten richtig einzuschätzen, abnimmt. Daraufhin zeigen wir, dass direkte Messungen dieser psychologischen Faktoren diese Trends teilen: Daten Indices zu Pessimismus steigen, zu Optimismus sinken mit dem Alter und ein Index über kognitive Schwäche steigt ebenfalls mit dem Alter. Schlussendlich zeigen wir, dass diese direkten psychologischen Maße tatsächlich wichtige quantitative Rollen in der Bildung subjektiver Überlebenserwartungen spielen. Pessimismus führt zu einer signifikanten Unterschätzung, Optimismus zu einer Überschätzung von Überlebenschancen und eine fehlende Kognition spielt eine zunehmend wichtige Rolle für die beobachtete Überschätzung der Überlebenschancen, wenn Individuen älter werden. Dieser Effekt dominiert, weshalb ältere Menschen ihre Überlebenserwartungen mehr und mehr überschätzen. Wir schließen unsere Analyse mit einem Ausblick, der argumentiert, dass die treibenden Kräfte für Verzerrungen in Wahrscheinlichkeitseinschätzungen auf ökonomische Entscheidungen im Allgemeinen nur mithilfe struktureller Lebenszyklusmodells studiert werden können, welches Wissenschaftlern ermöglicht, simultan multiple Risiken und die Beeinflussung der Erwartungsbildung über diese Risiken durch psychologische Faktoren zu berücksichtigen.

Suggested Citation

  • 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.
  • Handle: RePEc:mea:meawpa:201801
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    1. 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.

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I10 - Health, Education, and Welfare - - Health - - - General

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