IDEAS home Printed from https://ideas.repec.org/a/spr/soinre/v152y2020i3d10.1007_s11205-020-02469-7.html
   My bibliography  Save this article

Private Information and Misinformation in Subjective Life Expectancy

Author

Listed:
  • Dong Chen

    (Shandong University)

  • Dennis Petrie

    (Monash University)

  • Kam Tang

    (The University of Queensland)

  • Dongjie Wu

    (The University of Queensland)

Abstract

Good retirement planning requires accurate estimation of the time horizon, that is, the lifespan. People may overestimate or underestimate their lifespan and, as a result, under- or over-save for their retirement. Determining to what extent a person overestimates or underestimates their lifespan requires the separation of private information (e.g. family longevity history) and misinformation (e.g. misperception of one’s related cohort life expectancy). This paper proposes a method to identify and separate the effects of private information and misinformation on one’s subjective life expectancy. The method requires the person to provide their subjective life expectancy estimations for not only themselves but also for their peers. We apply the method to a sample of about 700 Chinese adults aged 40 and above. We find that misinformation leads the respondents to overestimate their remaining lifespan by 18% on average. We also find that private information leads the respondents in our sample to believe that their remaining lifespan will be 12% longer on average than their peers of the same age and gender. However, the dispersion of the individual estimates is large, meaning that some people may significantly overestimate their lifespan while others significantly underestimate. Also, as age increases, the relative importance of private information in the subjective life expectancy increases as compared to misinformation.

Suggested Citation

  • Dong Chen & Dennis Petrie & Kam Tang & Dongjie Wu, 2020. "Private Information and Misinformation in Subjective Life Expectancy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 1061-1083, December.
    • Handle: RePEc:spr:soinre:v:152:y:2020:i:3:d:10.1007_s11205-020-02469-7
    DOI: 10.1007/s11205-020-02469-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11205-020-02469-7
    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/s11205-020-02469-7?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Martin Salm, 2010. "Subjective mortality expectations and consumption and saving behaviours among the elderly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(3), pages 1040-1057, August.
    2. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
    3. 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.
    4. Shun-ching Chan, Cheris, 2012. "Marketing Death: Culture and the Making of a Life Insurance Market in China," OUP Catalogue, Oxford University Press, number 9780195394078.
    5. Hanna Solinge & Kène Henkens, 2018. "Subjective life expectancy and actual mortality: results of a 10-year panel study among older workers," European Journal of Ageing, Springer, vol. 15(2), pages 155-164, June.
    6. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
    7. 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.
    8. S. Olshansky & Bruce Carnes, 1997. "Ever since gompertz," Demography, Springer;Population Association of America (PAA), vol. 34(1), pages 1-15, February.
    9. Griffin, Barbara & Loh, Vanessa & Hesketh, Beryl, 2013. "A mental model of factors associated with subjective life expectancy," Social Science & Medicine, Elsevier, vol. 82(C), pages 79-86.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    2. 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.
    3. Sunde, Uwe, 2023. "Age, longevity, and preferences," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    4. Anikó Bíró, 2013. "Subjective mortality hazard shocks and the adjustment of consumption expenditures," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1379-1408, October.
    5. Kárpáti, D.;, 2022. "Household Finance and Life-Cycle Economic Decisions under the Shadow of Cancer," Health, Econometrics and Data Group (HEDG) Working Papers 22/16, HEDG, c/o Department of Economics, University of York.
    6. Woojung Lee & William B. Wong & Stacey Kowal & Louis P. Garrison & David L. Veenstra & Meng Li, 2022. "Modeling the Ex Ante Clinical Real Option Value in an Innovative Therapeutic Area: ALK-Positive Non-Small-Cell Lung Cancer," PharmacoEconomics, Springer, vol. 40(6), pages 623-631, June.
    7. 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.
    8. 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.
    9. Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2016. "A life-cycle model with ambiguous survival beliefs," Journal of Economic Theory, Elsevier, vol. 162(C), pages 137-180.
    10. Gregorio Gimenez & Ana Isabel Gil-Lacruz & Marta Gil-Lacruz, 2021. "Is Happiness Linked to Subjective Life Expectancy? A Study of Chilean Senior Citizens," Mathematics, MDPI, vol. 9(17), pages 1-12, August.
    11. 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.
    12. Eric Budish & Benjamin Roin & Heidi Williams, 2013. "Do fixed patent terms distort innovation? Evidence from cancer clinical trials," Discussion Papers 13-001, Stanford Institute for Economic Policy Research.
    13. Hanna Solinge & Kène Henkens, 2018. "Subjective life expectancy and actual mortality: results of a 10-year panel study among older workers," European Journal of Ageing, Springer, vol. 15(2), pages 155-164, June.
    14. 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.
    15. Kuhn, Michael & Wrzaczek, Stefan & Prskawetz, Alexia & Feichtinger, Gustav, 2011. "Externalities in a life cycle model with endogenous survival," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 627-641.
    16. Tim Riffe & Pil H. Chung & Jeroen Spijker & John MacInnes, 2016. "Time-to-death patterns in markers of age and dependency," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 14(1), pages 229-254.
    17. Fischer, Barbara & Telser, Harry & Zweifel, Peter, 2018. "End-of-life healthcare expenditure: Testing economic explanations using a discrete choice experiment," Journal of Health Economics, Elsevier, vol. 60(C), pages 30-38.
    18. Joseph Cook & Joseph Golec & John Vernon & George Pink, 2011. "Real Option Value and Path Dependence in Oncology Innovation," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(2), pages 225-238.
    19. Celidoni, Martina & Costa-Font, Joan & Salmasi, Luca, 2022. "Too Healthy to Fall Sick? Longevity Expectations and Protective Health Behaviours during the First Wave of COVID-19," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 733-745.
    20. Spaenjers, Christophe & Spira, Sven Michael, 2015. "Subjective life horizon and portfolio choice," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 94-106.

    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:soinre:v:152:y:2020:i:3:d:10.1007_s11205-020-02469-7. 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.