|Title||Subjective mortality hazard shocks and the adjustment of consumption expenditures|
|Publication Type||Journal Article|
|Year of Publication||2013|
|Journal||Journal of Population Economics|
|Keywords||Consumption decisions, IV estimation, Subjective longevity|
I estimate the effect of shocks to subjective mortality hazards on consumption expenditures of retired individuals using the Survey of Health, Ageing and Retirement in Europe. I measure mortality expectations with survey responses on survival probabilities. To create plausibly exogenous variation in mortality hazard, I use the death of a sibling as an instrument. My results show that survey responses contain economically relevant information about longevity expectations and confirm the predictions of life-cycle theories about the effect of these expectations on intertemporal choice.