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What to Expect when you are Expecting Rationality: Testing Rational Expectations using Micro Data

dc.contributor.authorBenítez-Silva, Hugo A.
dc.contributor.authorDwyer, Debra Sabatini
dc.date.accessioned2007-04-25T20:21:47Z
dc.date.available2007-04-25T20:21:47Z
dc.date.issued2003-06
dc.identifier.urihttps://hdl.handle.net/2027.42/50583
dc.description.abstractThis paper tests the Rational Expectations (RE) hypothesis regarding retirement expectations, controlling for sample selection, reporting biases, and unobserved heterogeneity. We find that retirement expectations in the Health and Retirement Study (HRS) are consistent with the RE hypothesis. We also examine how a wide array of factors, such as wealth, income, health insurance, pensions, and health status influence retirement expectations formation using panel data from all available waves of the HRS. We further analyze how new information affects the evolution of retirement expectations and discover that, on average, individuals correctly anticipate most uncertain events when planning their retirement, except for some health conditions and economic factors. Our results have important implications for a wide variety of models in economics that assume rational behavior.en
dc.description.sponsorshipSocial Security Administrationen
dc.format.extent470734 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.publisherMichigan Retirement Research Center, University of Michigan, P.O. Box 1248, Ann Arbor, MI 48104en
dc.relation.ispartofseriesWP 2003-037en
dc.titleWhat to Expect when you are Expecting Rationality: Testing Rational Expectations using Micro Dataen
dc.typeWorking Paperen
dc.subject.hlbsecondlevelPopulation and Demography
dc.subject.hlbtoplevelSocial Sciences
dc.contributor.affiliationotherSUNY-Stony Brooken
dc.contributor.affiliationumcampusAnn Arboren
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/50583/1/wp037.pdfen_US
dc.owningcollnameRetirement and Disability Research Center, Michigan (MRDRC)


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