IDEAS home Printed from https://ideas.repec.org/a/spr/demogr/v55y2018i5d10.1007_s13524-018-0713-4.html
   My bibliography  Save this article

Individual Uncertainty About Longevity

Author

Listed:
  • Brigitte Dormont

    (Université Paris-Dauphine, PSL University, LEDa, Place du Maréchal de Lattre de Tassigny)

  • Anne-Laure Samson

    (Université Paris-Dauphine, PSL University, LEDa, Place du Maréchal de Lattre de Tassigny)

  • Marc Fleurbaey

    (Princeton University)

  • Stéphane Luchini

    (CNRS & EHESS, GREQAM, Centre de la Vieille Charité)

  • Erik Schokkaert

    (KU Leuven
    CORE, Université Catholique de Louvain)

Abstract

This article presents an assessment of individual uncertainty about longevity. A survey performed on 3,331 French people enables us to record several survival probabilities per individual. On this basis, we compute subjective life expectancies (SLE) and subjective uncertainty regarding longevity (SUL), the standard deviation of each individual’s subjective distribution of her or his own longevity. It is large and equal to more than 10 years for men and women. Its magnitude is comparable to the variability of longevity observed in life tables for individuals under 60, but it is smaller for those older than 60, which suggests use of private information by older respondents. Our econometric analysis confirms that individuals use private information—mainly their parents’ survival and longevity—to adjust their level of uncertainty. Finally, we find that SUL has a sizable impact, in addition to SLE, on risky behaviors: more uncertainty on longevity significantly decreases the probability of unhealthy lifestyles. Given that individual uncertainty about longevity affects prevention behavior, retirement decisions, and demand for long-term care insurance, these results have important implications for public policy concerning health care and retirement.

Suggested Citation

  • Brigitte Dormont & Anne-Laure Samson & Marc Fleurbaey & Stéphane Luchini & Erik Schokkaert, 2018. "Individual Uncertainty About Longevity," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1829-1854, October.
  • Handle: RePEc:spr:demogr:v:55:y:2018:i:5:d:10.1007_s13524-018-0713-4
    DOI: 10.1007/s13524-018-0713-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13524-018-0713-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s13524-018-0713-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anne Case & Christina Paxson, 2005. "Sex differences in morbidity and mortality," Demography, Springer;Population Association of America (PAA), vol. 42(2), pages 189-214, May.
    2. Brouwer, Werner B.F. & van Exel, N. Job A., 2005. "Expectations regarding length and health related quality of life: Some empirical findings," Social Science & Medicine, Elsevier, vol. 61(5), pages 1083-1094, September.
    3. Thomas Davidoff & Jeffrey R. Brown & Peter A. Diamond, 2005. "Annuities and Individual Welfare," American Economic Review, American Economic Association, vol. 95(5), pages 1573-1590, December.
    4. Delprat, G. & Leroux, M.-L. & Michaud, P.-C., 2016. "Evidence on individual preferences for longevity risk," Journal of Pension Economics and Finance, Cambridge University Press, vol. 15(2), pages 160-179, April.
    5. 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.
    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. Marc Fleurbaey & Stéphane Luchini & Christophe Muller & Erik Schokkaert, 2013. "Equivalent Income And Fair Evaluation Of Health Care," Health Economics, John Wiley & Sons, Ltd., vol. 22(6), pages 711-729, June.
    8. 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.
    9. Sebnem Kalemli-Ozcan & David Weil, 2010. "Mortality change, the uncertainty effect, and retirement," Journal of Economic Growth, Springer, vol. 15(1), pages 65-91, March.
    10. Jin-Tan Liu & Meng-Wen Tsou & James K. Hammitt, 2007. "Health Information and Subjective Survival Probability: Evidence from Taiwan," Journal of Risk Research, Taylor & Francis Journals, vol. 10(2), pages 149-175, March.
    11. Ryan Edwards, 2013. "The cost of uncertain life span," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1485-1522, October.
    12. Michael D. Hurd, 2009. "Subjective Probabilities in Household Surveys," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 543-564, May.
    13. Anne‐Laure Samson & Erik Schokkaert & Clémence Thébaut & Brigitte Dormont & Marc Fleurbaey & Stéphane Luchini & Carine Van de Voorde, 2018. "Fairness in cost‐benefit analysis: A methodology for health technology assessment," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 102-114, January.
    14. Mirowsky, John, 1999. "Subjective life expectancy in the US: correspondence to actuarial estimates by age, sex and race," Social Science & Medicine, Elsevier, vol. 49(7), pages 967-979, October.
    15. Franco Peracchi & Valeria Perotti, 2010. "Subjective survival probabilities and life tables: Evidence from Europe," EIEF Working Papers Series 1016, Einaudi Institute for Economics and Finance (EIEF), revised Nov 2011.
    16. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, September.
    17. Maria Perozek, 2008. "Using subjective expectations to forecast longevity: do survey respondents know something we don’t know?," Demography, Springer;Population Association of America (PAA), vol. 45(1), pages 95-113, February.
    18. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C. & Zeldes, Stephen P., 2014. "What makes annuitization more appealing?," Journal of Public Economics, Elsevier, vol. 116(C), pages 2-16.
    19. Wu, Shang & Stevens, Ralph & Thorp, Susan, 2015. "Cohort and target age effects on subjective survival probabilities: Implications for models of the retirement phase," Journal of Economic Dynamics and Control, Elsevier, vol. 55(C), pages 39-56.
    20. Adeline Delavande & Jinkook Lee & Seetha Menon, 2017. "Eliciting Survival Expectations of the Elderly in Low-Income Countries: Evidence From India," Demography, Springer;Population Association of America (PAA), vol. 54(2), pages 673-699, April.
    21. L. Bissonnette & J. de Bresser, 2018. "Eliciting Subjective Survival Curves: Lessons from Partial Identification," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 36(3), pages 505-515, July.
    22. Adeline Delavande & Susann Rohwedder, 2011. "Differential Survival in Europe and the United States: Estimates Based on Subjective Probabilities of Survival," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1377-1400, November.
    23. Post, Thomas & Hanewald, Katja, 2013. "Longevity risk, subjective survival expectations, and individual saving behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 200-220.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Meyer & Gregory Ponthiere, 2020. "Human lifetime entropy in a historical perspective (1750–2014)," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(1), pages 129-167, January.
    2. Aburto, José Manuel & di Lego, Vanessa & Riffe, Tim & Kashyap, Ridhi & van Raalte, Alyson & Torrisi, Orsola, 2023. "A global assessment of the impact of violence on lifetime uncertainty," LSE Research Online Documents on Economics 118196, London School of Economics and Political Science, LSE Library.
    3. Kent Adsbøll Wickstrøm & Kim Klyver & Maryam Cheraghi-Madsen, 2022. "Age effect on entry to entrepreneurship: embedded in life expectancy," Small Business Economics, Springer, vol. 58(1), pages 57-76, January.
    4. Adeline Delavande & Jinkook Lee & Seetha Menon, 2017. "Eliciting Survival Expectations of the Elderly in Low-Income Countries: Evidence From India," Demography, Springer;Population Association of America (PAA), vol. 54(2), pages 673-699, April.
    5. Dimiter Philipov & Sergei Scherbov, 2020. "Subjective length of life of European individuals at older ages: Temporal and gender distinctions," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-14, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vesile Kutlu-Koc & Adriaan Kalwij, 2017. "Individual Survival Expectations and Actual Mortality: Evidence from Dutch Survey and Administrative Data," European Journal of Population, Springer;European Association for Population Studies, vol. 33(4), pages 509-532, October.
    2. Joan Costa-Font & Cristina Vilaplana-Prieto, 2022. "Biased survival expectations and behaviours: Does domain specific information matter?," Journal of Risk and Uncertainty, Springer, vol. 65(3), pages 285-317, December.
    3. Bruno Arpino & Pierluigi Conzo & Francesco Salustri, 2022. "I am a survivor, keep on surviving: early-life exposure to conflict and subjective survival probabilities in adult life," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 471-517, April.
    4. de Bresser, Jochem, 2021. "Evaluating the Accuracy of Counterfactuals The Role of Heterogeneous Expectations in Life Cycle Models," Other publications TiSEM a7e2b4d8-fed0-4e86-926f-d, Tilburg University, School of Economics and Management.
    5. Grevenbrock, Nils & Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2015. "Biased Survival Beliefs, Psychological and Cognitive Explanations, and the Demand for Life Insurances," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113203, Verein für Socialpolitik / German Economic Association.
    6. de Bresser, Jochem, 2019. "Measuring Subjective Survival Expectations : Do Response Scales Matter?," Other publications TiSEM 53bc2ec3-4126-4dfb-81f3-8, Tilburg University, School of Economics and Management.
    7. Spaenjers, Christophe & Spira, Sven Michael, 2015. "Subjective life horizon and portfolio choice," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 94-106.
    8. de Bresser, Jochem, 2021. "Evaluating the Accuracy of Counterfactuals The Role of Heterogeneous Expectations in Life Cycle Models," Discussion Paper 2021-034, Tilburg University, Center for Economic Research.
    9. Yang, Qianqian & Ye, Zihan & Chen, Rongda, 2024. "Working longer or working harder? Subjective survival expectations and labor supply in China," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 827-847.
    10. Nils Grevenbrock & Max Groneck & Alexander Ludwig & Alexander Zimper, 2021. "Cognition, Optimism, And The Formation Of Age‐Dependent Survival Beliefs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(2), pages 887-918, May.
    11. Alberto Palloni & Beatriz Novak, 2016. "Subjective survival expectations and observed survival: How consistent are they?," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 14(1), pages 187-228.
    12. de Bresser, Jochem, 2019. "The Role of Heterogeneous Expectations in Life Cycle Models : Evaluating the Accuracy of Counterfactuals," Other publications TiSEM 25d04a47-1020-47eb-ba94-4, Tilburg University, School of Economics and Management.
    13. Adeline Delavande & Jinkook Lee & Seetha Menon, 2017. "Eliciting Survival Expectations of the Elderly in Low-Income Countries: Evidence From India," Demography, Springer;Population Association of America (PAA), vol. 54(2), pages 673-699, April.
    14. Apostolos Papachristos & Georgia Verropoulou & George Ploubidis & Cleon Tsimbos, 2020. "Factors incorporated into future survival estimation among Europeans," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(2), pages 15-56.
    15. David R. Rappange & Job van Exel & Werner B. F. Brouwer, 2017. "A short note on measuring subjective life expectancy: survival probabilities versus point estimates," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(1), pages 7-12, January.
    16. de Bresser, Jochem, 2019. "Measuring subjective survival expectations – Do response scales matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 136-156.
    17. Wu, Shang & Stevens, Ralph & Thorp, Susan, 2015. "Cohort and target age effects on subjective survival probabilities: Implications for models of the retirement phase," Journal of Economic Dynamics and Control, Elsevier, vol. 55(C), pages 39-56.
    18. de Bresser, Jochem, 2016. "Test-Retest Reliability of Subjective Survival Expectations," Other publications TiSEM dfd6074d-31ae-4ecb-be25-6, Tilburg University, School of Economics and Management.
    19. Patrick Meyer & Gregory Ponthiere, 2020. "Human lifetime entropy in a historical perspective (1750–2014)," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(1), pages 129-167, January.
    20. John Payne & Namika Sagara & Suzanne Shu & Kirstin Appelt & Eric Johnson, 2013. "Life expectancy as a constructed belief: Evidence of a live-to or die-by framing effect," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 27-50, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:demogr:v:55:y:2018:i:5:d:10.1007_s13524-018-0713-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.