TY  - JOUR
AU  - Gan,Li
AU  - Gong,Guan
AU  - Hurd,Michael
AU  - McFadden,Daniel
TI  - Subjective Mortality Risk and Bequests
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10789
PY  - 2004
Y2  - September 2004
UR  - http://www.nber.org/papers/w10789
L1  - http://www.nber.org/papers/w10789.pdf
N1  - Author contact info:
Li Gan
Department of Economics
Texas A&M University
College Station, TX 77843-4228
Tel: 979/862-1667
Fax: 979/847-8747
E-Mail: gan@econmail.tamu.edu

Guan Gong
Shanghai University of Finance and Economics
777 Guoding RD, Shanghai
CHINA
E-Mail: ggong@shufe.edu.cn

Michael D. Hurd
RAND Corporation
1776 Main Street
Santa Monica, CA 90407
Tel: 310/451-6945
Fax: 310/451-6923
E-Mail: mhurd@rand.org

Daniel L. McFadden
University of California, Berkeley
Department of Economics
549 Evans Hall #3880
Berkeley, CA 94707-3880
Tel: 510/643-8428
Fax: 510/642-0638
E-Mail: mcfadden@econ.berkeley.edu
AB  - This paper investigates whether subjective expectations about future mortality affect consumption and bequests motives. We estimate a dynamic life-cycle model based on subjective survival rates and wealth from the panel dataset Asset and Health Dynamics among Oldest Old. We find that bequest motives are small on average, which indicates that most bequests are involuntary or accidental. Moreover, parameter estimates using subjective mortality risk perform better in predicting out-of-sample wealth levels than estimates using life table mortality risks, suggesting that decisions about consumption and saving are influenced more strongly by individual-level beliefs about mortality risk than by group level mortality risk.
ER  -