@article {9214, title = {Does everyone use probabilities? The role of cognitive skills}, journal = {European Economic Review}, volume = {98}, year = {2017}, month = {Jan-09-2017}, pages = {73-85}, abstract = {What is the role of cognitive skills in decision making under uncertainty? We address this question by examining the relationship between responses to survey questions about subjective probabilities of stock market returns and stock holding decisions. Based on data from the Health and Retirement Study (HRS), we find that for individuals with lower cognitive skills the association between measured probabilities and decisions is weaker than for individuals with higher cognitive skills. Additional evidence suggests that individuals with lower cognitive skills are more likely to give heuristic answers to questions about stock return probabilities. A likely explanation is that individuals with lower cognitive skills have a fuzzier mental representation of stock returns that cannot be captured by a unique well-defined probability distribution. In contrast, individuals with higher cognitive skills are more likely to act as if subjective probabilities are meaningful measures of uncertainty. We discuss whether or not the behavior of the latter can be seen as more {\textquotedblleft}rational{\textquotedblright}.}, keywords = {Cognitive Ability, Probability}, issn = {00142921}, doi = {10.1016/j.euroecorev.2017.06.009}, url = {http://linkinghub.elsevier.com/retrieve/pii/S0014292117301101http://api.elsevier.com/content/article/PII:S0014292117301101?httpAccept=text/xmlhttp://api.elsevier.com/content/article/PII:S0014292117301101?httpAccept=text/plain}, author = {Binswanger, Johannes and Salm, Martin} } @article {7423, title = {The longevity gap between Black and White men in the United States at the beginning and end of the 20th century.}, journal = {Am J Public Health}, volume = {100}, year = {2010}, month = {2010 Feb}, pages = {357-63}, publisher = {100}, abstract = {

OBJECTIVES: We sought to assess whether the disparity in mortality rates between Black and White men decreased from the beginning to the end of the 20th century.

METHODS: We used Cox proportional hazard models for mortality to estimate differences in longevity between Black and White Civil War veterans from 1900 to 1914 (using data from a pension program) and a later cohort of male participants (using data from the 1992 to 2006 Health and Retirement Study). In sensitivity analysis, we compared relative survival of veterans for alternative baseline years through 1914.

RESULTS: In our survival analysis, the Black-White male difference in mortality, both unadjusted and adjusted for other influences, did not decrease from the beginning to the end of the 20th century. A 17\% difference in Black-White mortality remained for the later cohort even after we controlled for other influences. Although we could control for fewer other influences on longevity, the Black-White differences in mortality for the earlier cohort was 18\%.

CONCLUSIONS: In spite of overall improvements in longevity, a major difference in Black-White male mortality persists.

}, keywords = {Aged, Black or African American, Health Status Disparities, Humans, Longevity, Longitudinal Studies, Male, Men{\textquoteright}s health, Middle Aged, Mortality, Proportional Hazards Models, Survival Analysis, United States, Veterans, White People}, issn = {1541-0048}, doi = {10.2105/AJPH.2008.158188}, author = {Frank A Sloan and Padmaja Ayyagari and Salm, Martin and Grossman, Daniel} } @article {7508, title = {Subjective Mortality Expectations and Consumption and Saving Behaviours among the Elderly}, journal = {Canadian Journal of Economics}, volume = {43}, year = {2010}, note = {Using Smart Source Parsing August pp}, pages = {1040-1057}, publisher = {43}, abstract = {Life expectancy is an important factor that individuals have to take into account for saving and consumption choices. The life-cycle model of consumption and saving behaviour predicts that consumption growth should decrease with higher mortality rates. The aim of this study is to test this hypothesis based on data about subjective longevity expectations from the Health and Retirement Study merged with detailed consumption data from two waves of the Consumption and Activities Mail Survey. This study finds that an increase in subjective mortality by 1 corresponds to an annual decrease in consumption of non-durable goods of around 1.8 .}, keywords = {Consumption and Savings, Employment and Labor Force, Event History/Life Cycle, Health Conditions and Status, Women and Minorities}, url = {https://www.jstor.org/stable/40800727}, author = {Salm, Martin} } @article {7355, title = {Does job loss cause ill health?}, journal = {Health Econ}, volume = {18}, year = {2009}, month = {2009 Sep}, pages = {1075-89}, publisher = {18}, abstract = {

This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason - the closure of their previous employers{\textquoteright} business. I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality.

}, keywords = {Activities of Daily Living, Age Factors, Cohort Studies, Cross-Sectional Studies, Employment, Female, Health Status, Humans, Male, Mental Health, Middle Aged, Sex Factors, Smoking, Socioeconomic factors}, issn = {1099-1050}, doi = {10.1002/hec.1537}, author = {Salm, Martin} } @article {7180, title = {Mechanisms of Structural Models: The Case of the Mickey Mantle Effect}, journal = {American Economic Review, Papers and Proceedings}, volume = {May}, year = {2007}, note = {http://www.econ.duke.edu/ hf14/publication/mickey-mantle/mickey_mantle_aer_pub.pdf}, pages = {53-9}, publisher = {May}, keywords = {Health Conditions and Status, Medicare/Medicaid/Health Insurance}, url = {https://www.jstor.org/stable/30034420}, author = {Fang, Hanming and Keane, Michael P. and Ahmed Khwaja and Salm, Martin and Daniel S. Silverman} } @mastersthesis {6078, title = {Essays on Health and Household Finances}, year = {2006}, month = {2006}, school = {Duke University}, abstract = {This dissertation consists of three essays on the economics of health and household finances. The first essay investigates how subjective mortality expectations and heterogeneity in time and risk preferences affect the consumption and saving behaviors of the elderly. This study uses data on information about preferences and subjective mortality expectations from the Health and Retirement Study merged with detailed consumption data from two waves of the Consumption and Activities Mail Survey. The main results are: (1) consumption and saving choices vary with subjective mortality rates and reported time and risk preferences in a way that is consistent with the life cycle model; and (2) there is substantial heterogeneity in the estimated time discount rates and risk aversion parameters. The second essay examines the effect of job loss on health for near elderly employees. It uses longitudinal data from the Health and Retirement Study. Job loss is a major cause of economic insecurity for working age individuals, and can cause a reduction in income and loss of health insurance. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason - the closure of their previous employers{\textquoteright} business. This study finds no causal effect of exogenous job loss on various measures of health, which suggests that poor health of the unemployed can be explained by reverse causality. Instrumental variables regressions are used to estimate the effect of loss of health insurance, loss of income, and re-employment on health, and again there are no statistically significant effects. The third essay examines the welfare effects of tax subsidies for insurance premiums in a model of an insurance market with private information. This study finds that any second-best equilibrium can be achieved for some rate of a proportional premium subsidy. These second-best outcomes can typically not be achieved in a private insurance market without subsidies. This result suggests that subsidies for health insurance contributions, such as the tax deduction for employers{\textquoteright} health insurance contribution in the United States, can mitigate the effects of adverse selection in health insurance markets.}, keywords = {Health Conditions and Status, Net Worth and Assets}, author = {Salm, Martin} }