Lopes, Paula 
ORCID: 0009-0009-7391-7788 and Michaelides, Alexander
(2007)
Rare events and annuity market participation.
Finance Research Letters, 4 (2).
pp. 82-91.
ISSN 1544-6123
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: the conclusion is robust to disentangling risk aversion from intertemporal substitution and to allowing portfolio investment in a stock market index.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.sciencedirect.com/science/journal/15446... |
| Additional Information: | © 2007 Elsevier |
| Divisions: | Financial Markets Group Economics |
| Subjects: | H Social Sciences > HB Economic Theory |
| JEL classification: | H - Public Economics > H0 - General > H00 - General D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice; Investment Decisions E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth |
| Date Deposited: | 12 May 2008 13:53 |
| Last Modified: | 11 Dec 2024 23:14 |
| URI: | http://eprints.lse.ac.uk/id/eprint/4822 |
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