UM07-19: Errors in Subjective Survival Probabilities: Prevalence and Behavioral Responses.
Recent SSA-supported research has demonstrated that retirement planning and well-being are closely tied to probabilistic forecasts about future events. This project will use longitudinal data from the Health and Retirement Study to show that individuals’ subjective survival forecasts exhibit systematic biases relative to life table data. In particular, most respondents fail to account for increases in yearly mortality rates with age. The project aims to assess the role of this bias in suboptimal timing of OASDI benefit claiming and retirement, and to examine the sensitivity of the findings to the framing of questions designed to elicit expectations.
- Subjective Survival Probabilities in the Health and Retirement Study: Systematic Biases and Predictive Validity (Working Paper)