Subjective Probabilities in Household Surveys.

TitleSubjective Probabilities in Household Surveys.
Publication TypeJournal Article
Year of Publication2009
AuthorsHurd, MD
JournalAnnu Rev Econom
Volume1
Pagination543-562
Date Published2009 Jun 01
ISSN Number1941-1383
Abstract

<p>Subjective probabilities are now collected on a number of large household surveys with the objective of providing data to better understand inter-temporal decision making. Comparison of subjective probabilities with actual outcomes shows that the probabilities have considerable predictive power in situations where individuals have considerable private information such as survival and retirement. In contrast the subjective probability of a stock market gain varies greatly across individuals even though no one has private information and the outcome is the same for everyone. An explanation is that there is considerable variation in accessing and processing information. Further, the subjective probability of a stock market gain is considerably lower than historical averages, providing an explanation for the relatively low frequency of stock holding. An important research objective will be to understand how individuals form their subjective probabilities.</p>

URLhttp://www.annualreviews.org/doi/abs/10.1146/annurev.economics.050708.142955
DOI10.1146/annurev.economics.050708.142955
User Guide Notes

http://www.ncbi.nlm.nih.gov/pubmed/21643535?dopt=Abstract

Endnote Keywords

stock market expectations/subjective survival/retirement expectations/focal point responses/PORTFOLIO CHOICE/SOCIAL-SECURITY/PANEL DATA/RETIREMENT/EXPECTATIONS/HEALTH/SURVIVAL/MODELS/RETURNS

Endnote ID

25390

Alternate JournalAnnu Rev Econom
Citation Key7301
PubMed ID21643535
PubMed Central IDPMC3106311
Grant ListP01 AG008291 / AG / NIA NIH HHS / United States
P01 AG008291-15 / AG / NIA NIH HHS / United States
P01 AG026571 / AG / NIA NIH HHS / United States