Speaker: Dr.Abigail Hurwitz 

Affiliation:  The HebrewUniversity 

Subject: "Health Shocks, RiskPreferences, and Annuity Choices"

Abstract:

Inthis study, we investigate the simultaneous influence of risk type and riskpreferences on the demand for annuities. Utilizing a comprehensive dataset ofretirees' payout choices from a prominent Swedish pension company, combinedwith administrative data, we construct proxies for risk preferences infinancial and health-related domains. Through a quasi-experimental design thatexploits individuals' reactions to a malignant cancer diagnosis aroundretirement, we establish a causal link between changes in risk type andannuitization rates. Our findings reveal that the adverse selection effect onannuity demand is predominantly driven by individuals exhibiting financialrisk-averse preferences and those displaying risk tolerance in health-relatedcontexts.