Individual Survival Curves Comparing Subjective and Observed Mortality Risk
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 individualsurvival 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.
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