Replication data for: Annuities and Individual Welfare

Principal Investigator(s):  View help for Principal Investigator(s) Thomas Davidoff; Jeffrey R. Brown; Peter A. Diamond

Version:  View help for Version V1

Name File Type Size Last Modified
LICENSE.txt text/plain 14.6 KB 12/06/2019 10:36:AM
cloptstd050110.m text/plain 9.5 KB 12/06/2019 10:36:AM
focs.m text/plain 695 bytes 12/06/2019 10:36:AM
mcrrasH.m text/plain 799 bytes 12/06/2019 10:36:AM
qmatrix.mat application/octet-stream 170.8 KB 12/06/2019 10:36:AM
socs.m text/plain 1.4 KB 12/06/2019 10:36:AM
stan.m text/plain 1.2 KB 12/06/2019 10:36:AM

Project Citation: 

Davidoff, Thomas, Brown, Jeffrey R., and Diamond, Peter A. Replication data for: Annuities and Individual Welfare. Nashville, TN: American Economic Association [publisher], 2005. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116066V1

Project Description

Summary:  View help for Summary Advancing annuity demand theory, we present sufficient conditions for the optimality of full annuitization under market completeness which are substantially less restrictive than those used by Menahem E. Yaari (1965). We examine demand with market incompleteness, finding that positive annuitization remains optimal widely, but complete annuitization does not. How uninsured medical expenses affect demand for illiquid annuities depends critically on the timing of the risk. A new set of calculations with optimal consumption trajectories very different from available annuity income streams still shows a preference for considerable annuitization, suggesting that limited annuity purchases are plausibly due to psychological or behavioral biases.

Scope of Project

JEL Classification:  View help for JEL Classification
      D64 Altruism; Philanthropy; Intergenerational Transfers
      D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
      G22 Insurance; Insurance Companies; Actuarial Studies


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V1 [2019-12-06]

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