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The Predictive Validity of Subjective Probabilities of Survival

Author

Listed:
  • Michael D. Hurd

    (RAND and NBER)

  • Kathleen McGarry

    (University of California, Los Angeles and NBER)

Abstract

Although expectations, or more precisely subjective probability distributions, play a prominent role in models of decision making under uncertainty, we have had very little data on them. Based on panel data from the Health and Retirement Study, we study the evolution of subjective survival probabilities and their ability to predict actual mortality. In panel, respondents modify their survival probabilities in response to new information such as the onset of a new disease condition. Subjective survival probabilities predict actual survival: those who survived in the panel reported survival probabilities approximately 50% greater at baseline than those who died. Copyright Royal Economic Society 2002

Suggested Citation

  • 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.
    • Handle: RePEc:ecj:econjl:v:112:y:2002:i:482:p:966-985
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    References listed on IDEAS

    as
    1. F. Thomas Juster & Richard Suzman, 1995. "An Overview of the Health and Retirement Study," Journal of Human Resources, University of Wisconsin Press, vol. 30, pages 7-56.
    2. F. Thomas Juster, 1966. "Consumer Buying Intentions and Purchase Probability: An Experiment in Survey Design," NBER Books, National Bureau of Economic Research, Inc, number just66-2.
    3. J. Dominitz & C. F. Manski, "undated". "Using expectations data to study subjective income expectations," Institute for Research on Poverty Discussion Papers 1050-94, University of Wisconsin Institute for Research on Poverty.
    4. Daniel S. Hamermesh, 1985. "Expectations, Life Expectancy, and Economic Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(2), pages 389-408.
    5. Manski, C.F., 1989. "The Use Of Intentions Data To Predict Behaviour : A Best- Case Analysis," Working papers 8905, Wisconsin Madison - Social Systems.
    6. Michael D. Hurd & Kathleen McGarry, 1995. "Evaluation of the Subjective Probabilities of Survival in the Health and Retirement Study," Journal of Human Resources, University of Wisconsin Press, vol. 30, pages 268-292.
    7. Hamermesh, D.S. & Hamermesh, F.W., 1983. "Does perception of life expectancy reflect health knowledge?," American Journal of Public Health, American Public Health Association, vol. 73(8), pages 911-914.
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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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