TY - JOUR
T1 - Individual Risk Aversion, Inheritance Expectation and Household Annuity Ownership
AU - Guillemette, Michael
AU - Liu, Yi
N1 - Publisher Copyright:
© 2022 Association for Financial Counseling and Planning Education®.
PY - 2022/11/1
Y1 - 2022/11/1
N2 - Although risk preferences and inheritance expectations should affect annuitization decisions, few studies have empirically tested these relations. This study bridges the gap in the prior literature by investigating potential effects that consumer risk aversion and inheritance expectations have on annuitization. Using data from the 2012 wave of the Health and Retirement Study, this study finds that consumers who are more risk averse have a higher likelihood of owning household annuity income compared to consumers who are less risk averse. Consumers with a higher inheritance expectation are more likely to have household annuity income compared to those with a lower inheritance expectation. Finally, when risk aversion is interacted with inheritance expectation, it increases the likelihood of household annuity ownership.
AB - Although risk preferences and inheritance expectations should affect annuitization decisions, few studies have empirically tested these relations. This study bridges the gap in the prior literature by investigating potential effects that consumer risk aversion and inheritance expectations have on annuitization. Using data from the 2012 wave of the Health and Retirement Study, this study finds that consumers who are more risk averse have a higher likelihood of owning household annuity income compared to consumers who are less risk averse. Consumers with a higher inheritance expectation are more likely to have household annuity income compared to those with a lower inheritance expectation. Finally, when risk aversion is interacted with inheritance expectation, it increases the likelihood of household annuity ownership.
KW - Health and Retirement Study
KW - annuity
KW - bequest
KW - inheritance
KW - risk aversion
UR - http://www.scopus.com/inward/record.url?scp=85142056646&partnerID=8YFLogxK
U2 - 10.1891/JFCP-2021-0075
DO - 10.1891/JFCP-2021-0075
M3 - Article
AN - SCOPUS:85142056646
SN - 1052-3073
VL - 33
SP - 314
EP - 323
JO - Journal of Financial Counseling and Planning
JF - Journal of Financial Counseling and Planning
IS - 3
ER -