@article {7234, title = {Health status and health dynamics in an empirical model of expected longevity.}, journal = {J Health Econ}, volume = {27}, year = {2008}, month = {2008 May}, pages = {564-84}, publisher = {27}, abstract = {

Expected longevity is an important factor influencing older individuals{\textquoteright} decisions such as consumption, savings, purchase of life insurance and annuities, claiming of Social Security benefits, and labor supply. It has also been shown to be a good predictor of actual longevity, which in turn is highly correlated with health status. A relatively new literature on health investments under uncertainty, which builds upon the seminal work by Grossman [Grossman, M., 1972. On the concept of health capital and demand for health. Journal of Political Economy 80, 223-255] has directly linked longevity with characteristics, behaviors, and decisions by utility maximizing agents. Our empirical model can be understood within that theoretical framework as estimating a production function of longevity. Using longitudinal data from the Health and Retirement Study, we directly incorporate health dynamics in explaining the variation in expected longevities, and compare two alternative measures of health dynamics: the self-reported health change, and the computed health change based on self-reports of health status. In 38\% of the reports in our sample, computed health changes are inconsistent with the direct report on health changes over time. And another 15\% of the sample can suffer from information losses if computed changes are used to assess changes in actual health. These potentially serious problems raise doubts regarding the use and interpretation of the computed health changes and even the lagged measures of self-reported health as controls for health dynamics in a variety of empirical settings. Our empirical results, controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting, suggest that self-reported health changes are a preferred measure of health dynamics.

}, keywords = {Chronic disease, Delivery of Health Care, Empirical Research, Female, Health Expenditures, Health Status, Humans, Life Expectancy, Longevity, Male, Models, Econometric}, issn = {0167-6296}, doi = {10.1016/j.jhealeco.2007.09.008}, author = {Hugo Ben{\'\i}tez-Silva and Ni, Huan} } @mastersthesis {6030, title = {The Effects of Private Pension Types on Older American Workers Portfolio Decisions and the Role of Health Measures in Understanding Expected Longevity}, volume = {Ph. D.}, year = {2006}, note = {ISBN 9781124539911}, month = {2006}, pages = {182}, school = {State University of New York at Stony Brook}, abstract = {Private pensions are regarded as the most important source of retirement income other than Social Security. Previous studies have found significant effects of pensions on individual decisions regarding wealth accumulation, labor supply, and retirement income security. However, few studies have investigated the effects of pension on individuals portfolio choices. Using the Health and Retirement Study (HRS), a panel data set of Older Americans. my study is one of the first to investigate pension effects on older American workers portfolio choices by differentiating Defined-Benefit (DB) pensions from Defined-Contribution (DC) pensions. I first investigate how pension types affect individual stock market participation by performing a two-step procedure. Without differentiating between pension types, pension has been found to have a positive effect on stock investments. My results of both cross-sectional and panel analysis, after correcting for sample selection, and controlling for unobserved heterogeneity, show that compared to holding a DB pension, holding DC pensions not only decreases an individuals probability of participating in the stock market, but also leads to less investments in stocks after stock market entry. Secondly, I test pension type effects on older workers investment decisions in individual retirement accounts (IRAs), over which individuals have full control. Panel analysis shows that individuals with DC pensions are more likely to hold IRAs compared to those who have DBs. I also find that individuals have rather consistent investment patterns within their pension and IRA accounts. In order to better understand how individual expected longevity evolves over time, which can affect Older Americans investment planning horizon, we propose to use the self-reported health change as a direct measure of health flows in empirical models. Our results show that after controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting, self-reported health changes are a more appropriate measure of health dynamics than those used in earlier studies.}, keywords = {Health Conditions and Status, Net Worth and Assets, Pensions}, author = {Ni, Huan} }