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Differential Mortality in Europe and the U.S. Estimates Based on Subjective Probabilities of Survival

Author

Listed:
  • Adeline Delavande
  • Susann Rohwedder

Abstract

Estimates of differential mortality by socioeconomic status play an important role in several domains: in public policy for assessing distributional effects of public programs; in financial markets for the design of life insurance and annuities; and in individual decision making when figuring out how much to save for retirement. Traditionally, reliable estimates of differential mortality require rich panel data with large sample size. This paper proposes a new, less data-intensive approach relying on just a single cross-section of data. Rather than using observations on actual mortality in panel over time, the authors propose relating individuals' subjective probabilities of survival to variables of socioeconomic status in cross-section. They formulate the method in a model of survey response and provide an empirical validation based on data from the Health and Retirement Study comparing the alternative estimates to the traditional estimates of differential mortality for the same sample of baseline respondents. They present two applications. First, they document an increase in differential mortality in the U.S. over time, and second, they produce comparable estimates of differential mortality for 10 European countries and the U.S. based on subjective probabilities of survival.

Suggested Citation

  • Adeline Delavande & Susann Rohwedder, 2008. "Differential Mortality in Europe and the U.S. Estimates Based on Subjective Probabilities of Survival," Working Papers WR-613, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-613
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    References listed on IDEAS

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    Cited by:

    1. Adena, Maja & Myck, Michal, 2013. "Poverty and Transitions in Health," IZA Discussion Papers 7532, Institute of Labor Economics (IZA).
    2. repec:hum:wpaper:sfb649dp2010-040 is not listed on IDEAS
    3. Adeline Delavande & Hans-Peter Kohler, 2009. "Subjective expectations in the context of HIV/AIDS in Malawi," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 20(31), pages 817-875.
    4. Post, Thomas & Hanewald, Katja, 2013. "Longevity risk, subjective survival expectations, and individual saving behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 200-220.
    5. Post, Thomas & Hanewald, Katja, 2010. "Stochastic mortality, subjective survival expectations, and individual saving behavior," SFB 649 Discussion Papers 2010-040, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    6. repec:dau:papers:123456789/3481 is not listed on IDEAS
    7. repec:mea:meawpa:13273 is not listed on IDEAS

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    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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