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Rare events and annuity market participation

Lopes, Paula and Michaelides, Alexander (2005) Rare events and annuity market participation. Financial Markets Group Discussion Papers (553). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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Abstract

We investigate whether a rare event (like the default of the annuity provider) can explain the annuity market participation puzzle. High risk aversion is needed to change behavior in the presence of such a disastrous shock but higher risk aversion also makes annuities more valuable. Therefore, these rare events are unlikely candidates to explain the low take-up of voluntary annuities.

Item Type: Monograph (Discussion Paper)
Official URL: http://fmg.ac.uk
Additional Information: © 2005 The Authors
Divisions: Financial Markets Group
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
JEL classification: H - Public Economics > H0 - General > H00 - General
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth
Date Deposited: 30 Jul 2009 14:03
Last Modified: 15 Sep 2023 23:01
URI: http://eprints.lse.ac.uk/id/eprint/24672

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