Using Subjective Expectations to Forecast Longevity: Do Survey Respondents Know Something We Don't Know?

35 Pages Posted: 11 Jan 2006

See all articles by Maria G. Perozek

Maria G. Perozek

Federal Reserve Board - Research & Statistics

Date Written: December 14, 2005

Abstract

Future old-age mortality is notoriously difficult to predict because it requires not only an understanding of the process of senescence, which is influenced by genetic, environmental and behavioral factors, but also a prediction of how these factors will evolve going forward. In this paper, I argue that individuals are uniquely qualified to predict their own mortality based on their own genetic background, as well as environmental and behavioral risk factors that are often known only to the individual. Using expectations data from the 1992 HRS, I construct subjective cohort life tables that are shown to predict the unusual direction of revisions to U.S. life expectancy by gender between 1992 and 2004; that is, the SSA revised up male life expectancy in 2004 and at the same revised down female life expectancy, narrowing the gender gap in longevity by 25 percent over this period. Further, the subjective expectations of women suggest that female life expectancies produced by the Social Security Actuary might still be on the high side, while the subjective life expectancies for men appear to be roughly in line with the 2004 life tables.

Keywords: Mortality risk, life tables, subjective expectations

JEL Classification: J10, J11

Suggested Citation

Perozek, Maria G., Using Subjective Expectations to Forecast Longevity: Do Survey Respondents Know Something We Don't Know? (December 14, 2005). FEDS Paper No. 2005-68. Available at SSRN: https://ssrn.com/abstract=874760 or http://dx.doi.org/10.2139/ssrn.874760

Maria G. Perozek (Contact Author)

Federal Reserve Board - Research & Statistics ( email )

Washington, DC 20551
United States
202-452-2692 (Phone)
202-728-5889 (Fax)

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