Findings from HEC Montreal in the Area of Healthcare Economics Described (Individual survival curves comparing subjective and observed mortality…
Findings from HEC Montreal in the Area of Healthcare Economics Described (Individual survival curves comparing subjective and observed mortality risks)
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The news reporters obtained a quote from the research from HEC Montreal, "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 that feature both observed and unobserved heterogeneity. This allows us to compare objective and subjective estimates of remaining life expectancy for various groups and compare welfare effects of objective and subjective mortality risk using the life cycle model of consumption. We find that subjective and objective hazards are not the same. The median welfare loss from misperceptions of mortality risk when annuities are not available is 7% of current wealth at age 65 whereas more than 25% of respondents have losses larger than 60% of wealth."
According to the news reporters, the research concluded: "When annuities are available and exogenously given, the welfare loss is substantially lower."
For more information on this research see: Individual survival curves comparing subjective and observed mortality risks. Health Economics, 2017;26(12):E285-E303. Health Economics can be contacted at: Wiley,
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