Uncertain Health and Survival: Effects on End-of-Life Consumption.
This paper analyzes the impact of health and survival uncertainty on the saving and consumption decisions of retirees. A dynamic programming approach is used to model the household's planning problem. The utility parameters are estimated using panel data. The authors find that a fall into poor health raises the marginal utility from consumption. Simulations are used to indicate the effects of falling into poor health and loss of spouse. They reveal a large transfer from the health to the sick partner and a strong dependence of saving on the survivor benefits, suggesting that concern about the surviving spouse is an important motive for saving.
Year of publication: |
1997
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Authors: | Lillard, Lee A ; Weiss, Yoram |
Published in: |
Journal of Business & Economic Statistics. - American Statistical Association. - Vol. 15.1997, 2, p. 254-68
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Publisher: |
American Statistical Association |
Saved in:
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