Eliciting Subjective Survival Curves: Lessons from Partial Identification

39 Pages Posted: 17 Sep 2014

See all articles by Luc Bissonnette

Luc Bissonnette

Université Laval

Jochem de Bresser

Tilburg University - Tilburg University School of Economics and Management

Date Written: September 2, 2014

Abstract

When analyzing subjective expectations, researchers commonly apply (non-)parametric approximations to point identify beliefs. We propose a new take on this type of data that does not impose a functional form on expectations. Using the widely researched example of subjective survival expectations, we construct bounds for subjective survival curves. These bounds allow us to partially identify subjective life expectancy. We show that the informativeness of the bounds depends on our willingness to interpolate beliefs between data points. If we do not smooth between the elicited points on the survival functions, the bounds are too wide for useful inference. However, if we do interpolate and allow for a limited amount of rounding, the resulting bounds are narrow enough to show variation in life expectancy with age and self-reported health, the strongest predictors in point identified models. Finally, we match the subjective data to life tables. While analysis that point identifies life expectancy, either parametrically or non-parametrically, rejects consistency of expectations with actuarial forecasts for women, the bounds show that allowing for rounding renders the subjective data consistent with forecasts on average.

Keywords: Subjective expectations, life expectancy, partial identification

Suggested Citation

Bissonnette, Luc and Bresser, Jochem de, Eliciting Subjective Survival Curves: Lessons from Partial Identification (September 2, 2014). Netspar Discussion Paper No. 09/2014-039, Available at SSRN: https://ssrn.com/abstract=2496974 or http://dx.doi.org/10.2139/ssrn.2496974

Luc Bissonnette

Université Laval ( email )

Université Laval, Pavillon J-A-DeSève, #2264
Québec, Quebec G1K 7P4 G1V0A6
Canada

Jochem de Bresser (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands

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