Subjective Health Expectations

25 Pages Posted: 11 Sep 2009 Last revised: 9 Oct 2014

See all articles by Kim P. Huynh

Kim P. Huynh

Government of Canada - Bank of Canada; Indiana University Bloomington - Department of Economics

Juergen Jung

Towson University - Department of Economics

Date Written: July 14, 2014

Abstract

Subjective health expectations are derived using data from the Health and Retirement Study (HRS). We first use a Bayesian updating mechanism to correct for focal point responses and reporting errors of the original health expectations variable. We then test the quality of the health expectations measure and describe its correlation with various health indicators and other individual characteristics. Our results indicate that subjective health expectations do contain additional information that is not incorporated in subjective mortality expectations and that the rational expectations assumption cannot be rejected for subjective health expectations. Finally, the data suggest that individuals younger than 70 years of age seem to be more pessimistic about their health than individuals in their 70's.

Keywords: Subjective Expectations, Rational Health Expectations, Focal Points, Bayesian Updating of Expectations, Work Limiting Health Problems

JEL Classification: I10, D84, C11, C23

Suggested Citation

Huynh, Kim P. and Jung, Juergen, Subjective Health Expectations (July 14, 2014). Available at SSRN: https://ssrn.com/abstract=1470858 or http://dx.doi.org/10.2139/ssrn.1470858

Kim P. Huynh (Contact Author)

Government of Canada - Bank of Canada ( email )

234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Juergen Jung

Towson University - Department of Economics ( email )

Baltimore, MD
United States
812-345-9182 (Phone)

HOME PAGE: http://https://juejung.github.io/

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