Framing Longevity Income

22 Pages Posted: 23 Sep 2017 Last revised: 2 Mar 2018

See all articles by Michael Guillemette

Michael Guillemette

Texas Tech University - Department of Personal Financial Planning

Jesse Jurgenson

Iowa State University

Deanna L. Sharpe

University of Missouri at Columbia

Xianwu Zhang

John Carroll University

Date Written: February 27, 2018

Abstract

This paper analyzes the effect of framing on the stated demand for longevity annuities. We test whether longevity income framed as “insurance” is more attractive than longevity income framed as an “annuity,” since longevity income is consumption protection. In a sample of 1,425 respondents, we find that when the longevity insurance frame is shown before the longevity annuity frame, respondents are less likely to state a demand for a longevity annuity. In addition, we find that people with higher numeracy are less likely to succumb to longevity income framing effects.

Keywords: Annuities; Annuitization; Retirement Income; Expected Utility Theory; Framing; Longevity Insurance; Behavioral Finance; Longevity Income; Numeracy

JEL Classification: D10, D81, G22, G40

Suggested Citation

Guillemette, Michael and Jurgenson, Jesse and Sharpe, Deanna L. and Zhang, Xianwu, Framing Longevity Income (February 27, 2018). 2018 Academic Research Colloquium for Financial Planning and Related Disciplines, Available at SSRN: https://ssrn.com/abstract=3041624 or http://dx.doi.org/10.2139/ssrn.3041624

Michael Guillemette (Contact Author)

Texas Tech University - Department of Personal Financial Planning ( email )

1301 Akron Ave, HS-260
Box 41210
Lubbock, TX 79409-1210
United States

Jesse Jurgenson

Iowa State University ( email )

Ames, IA 50011-2063
United States

Deanna L. Sharpe

University of Missouri at Columbia ( email )

Consumer and Family Economics
Columbia, MO 65211
United States
573-882-9652 (Phone)
573-884-8389 (Fax)

Xianwu Zhang

John Carroll University ( email )

1 Carroll Blvd
University Heights, OH 44118
United States

HOME PAGE: http://jcu.edu/

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