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We study the impact of housing wealth and individual preferences on demand for annuities and long-term care insurance (LTCI). We build a multi-state lifecycle model that includes longevity risk and health shocks. The preference is represented by a recursive utility function that separates risk...
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aging. In addition, LTC costs are heterogeneous across individuals and unknown early in life. In this paper, we add … uncertainty over the arrival and magnitude of future LTC costs into a life-cycle model with endogenous aging, and we analyze how …
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