Rawley Z. Heimer|Kristian Ove R. Myrseth|Raphael Schoenle
YOLO: Mortality Beliefs and Household Finance Puzzles
Brandeis University|Trinity College Dublin
abstract study effect subjective mortality beliefs lifecycle behavior new survey evidence document survival underestimated overestimated young old calibrate canonical lifecycle model elicited beliefs relative calibrations using actuarial probabilities young undersave 26 retirees draw assets 27 slower models fit consumption data improves 88 crosssectional regressions support models predictions distorted mortality beliefs correlate savings behavior controlling risk preferences cognitive socioeconomic factors overweighting likelihood rare events contributes mortality belief distortions