Stability of Preference against Aging and Health Shocks: A comparison between Japan and the United States

Author Name HASHIMOTO Hideki  (University of Tokyo) /ICHIMURA Hidehiko  (Faculty Fellow, RIETI) /SHIMIZUTANI Satoshi  (Consulting Fellow, RIETI)
Creation Date/NO. August 2013 13-E-068
Research Project Toward a Comprehensive Resolution of the Social Security Problem: A new economics of aging
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This study explores stability of preference against aging and health shocks. Contrary to a vast amount of literature assuming that risk attitude is unchanged over time, we utilize JSTAR (Japanese Study of Aging and Retirement), which provides longitudinal data on the middle aged and elderly comparable with the Health and Retirement Study (HRS)/English Longitudinal Study of Ageing (ELSA)/Survey of Health, Ageing and Retirement in Europe (SHARE), to examine how aging and past health experiences systematically affect risk attitude. We find that while there is empirical evidence that aging gradually causes individuals to be more risk averse, health shocks do not seem to affect risk preference systematically.