Test-Retest Reliability of Subjective Survival Expectations

This paper analyzes the test-retest reliability of subjective survival expectations. Using a nationally representative sample from the Netherlands, we compare probabilities reported by the same individuals in two different surveys that were fielded in the same month. We evaluate reliability both at the level of reported probabilities and through a model that relates expectations to socio-demographic variables. Test-retest correlations of survival probabilities are between 0.5 and 0.7, which is similar to subjective well-being (Krueger and Schkade, 2008). Only 20% of probabilities are equal across surveys, but up to 61-77% are consistent once we account for rounding. Models that analyze all probabilities jointly reveal similar associations between covariates and the hazard of death in test and retest datasets. Moreover, expectations are persistent at the level of the individual and this unobserved heterogeneity is strongly correlated across surveys (r ≈ 0.8-0.9). Finally, we use a life-cycle model to map survival expectations into simulated wealth and labor supply. Though wealth accumulation is sensitive to survival expectations, simulated probabilities from a model that corrects for rounding are sufficiently reliable to yield reliable wealth profiles. Taken together this evidence supports the reliability of subjective survival expectations