Previous studies have shown that, on average, individuals are pessimistic about their remaining lifetime, which could yield suboptimal long-term decisions. Using Dutch household survey data supplemented with death registry data, we found that individuals with a one-year better knowledge of population life expectancy had a significantly smaller difference of about 0.3 years, on average, between their predicted subjective and objective remaining lifetime. This finding was robust to whether socioeconomic status and health-related covariates were controlled for. Our findings suggest that a policy of informing individuals about population life expectancies for people of their age and gender, can help them to make better long-term decisions through more accurate beliefs on remaining lifetime.
This project is conducted in cooperation with Adriaan Kalwij, Ph.D. (Utrecht University, The Netherlands). The results were presented at a number of conferences and published as Netspar Discussion paper No. DP 02/2017-004 and submitted to Journal of Economic Behavior & Organization in July 2020.
