Does Respondent’s Knowledge on Population Life Expectancy Influence the Accuracy of Subjective Survival Probabilities? | Munich Center for the Economics of Aging - MEA
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Social Policy and Old Age Provision

Does Respondent’s Knowledge on Population Life Expectancy Influence the Accuracy of Subjective Survival Probabilities?

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. 

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Kutlu-Koc

Dr. Vesile Kutlu Koc