Health Shocks and Annuity Choices
研究发现首次确诊恶性肿瘤会降低退休前人群的年金购买率5.5%，并导致年金价值损失33%，但行为调整弹性仅为0.17，表明默认选项削弱了个人对健康信息的反应。
This study examines how a first-time malignant cancer diagnosis, acting as an informational shock to perceived longevity, affects the demand for life annuities. Using a quasi-experimental design and exploiting Swedish administrative data, we show that receiving a cancer diagnosis close to retirement reduces annuitization rates by 5.5%. The diagnosis lowers the money’s worth ratio of a life annuity by 33%, representing a substantial financial loss. Combined with the modest behavioral response, this yields a low demand elasticity of 0.17 with respect to the perceived annuity value. Evidence from a complementary laboratory experiment indicates that this limited adjustment is driven by the influence of a default option that reduces responsiveness to private health information and may disadvantage individuals in poor health. This paper was accepted by Camelia Kuhnen, finance. Funding: This work was supported by The Henry Crown Institute of Business Research in Israel [Grant 08923100], the Israel Science Foundation [Grant 1637/23], the Jeremy Coller Foundation [Grant 0612017581], the Hamrin Foundation [Grant 2023-09], the Solomon Lew Center for Consumer Behavior [Grant 08923200], the Swedish Research Council for Health Working Life and Welfare [Grant 2023-00046], and the Center for Agriculture, Environment and Natural Resource [Grant 0004]. Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mnsc.2025.00682 .