Estimating Life Cycle Effects of Survival Probabilities in the Health and Retirement Study
This paper attempts to confirm the life-cycle relationship that lower subjective survival probabilities should lead to less positively sloped consumption trajectories. I use the results of six waves of subjective survival probability questions in the HRS to construct an index of survival belief that exploits the panel nature of the data by summarizing all of a respondent’s answers to such questions. In conjunction with constructed consumption values from the financial section of the HRS, I test the life-cycle relationship using OLS and Least-Absolute Deviation regression. I find weak evidence that the life-cycle effect of subjective survival probability is significant in a high-cognitive-ability sub-sample of the HRS. Measurement error in the constructed consumption data is problematic.
|Date of creation:||Sep 2005|
|Date of revision:|
|Contact details of provider:|| Postal: P.O. Box 1248, Ann Arbor, MI 48104|
Phone: (734) 615-0422
Fax: (734) 647-4575
Web page: http://www.mrrc.isr.umich.edu/publications/papers/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael D. Hurd & Kathleen McGarry, 1997.
"The Predictive Validity of Subjective Probabilities of Survival,"
NBER Working Papers
6193, National Bureau of Economic Research, Inc.
- Michael D. Hurd & Kathleen McGarry, 2002. "The Predictive Validity of Subjective Probabilities of Survival," Economic Journal, Royal Economic Society, vol. 112(482), pages 966-985, October.
- Robert E. Hall, 1981.
"Intertemporal Substitution in Consumption,"
NBER Working Papers
0720, National Bureau of Economic Research, Inc.
- Hamermesh, Daniel S, 1984.
"Life-Cycle Effects on Consumption and Retirement,"
Journal of Labor Economics,
University of Chicago Press, vol. 2(3), pages 353-70, July.
- Kuehlwein, Michael, 1993. "Life-Cycle and Altruistic Theories of Saving with Lifetime Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 38-47, February.
- Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July.
When requesting a correction, please mention this item's handle: RePEc:mrr:papers:wp103. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (MRRC Administrator)
If references are entirely missing, you can add them using this form.