Speaker: Martijn de Vries, VU Amsterdam
Title: Beliefs and preferences during the life-cycle
Abstract: Consumption and saving over the life-cycle ideally reflect the pension member’s characteristics. However, a holistic perspective of preferences and beliefs of individuals regarding life-cycle decisions remains rather unknown. We field a survey in a representative sample of the Dutch population to quantitatively measure preferences and beliefs in multiple domains. Although there is heterogeneity, we find in the aggregate that risk and time preferences are domain dependent: individuals are more risk averse and more patient in the pension domain, compared to a standard lottery context. Additionally, individuals are loss averse and they distort probabilities, but this does not vary significantly across domains. Risk aversion correlates strongly with other preference parameters and with beliefs about future income. Finally, we find that age, income, and education are significant drivers for preference heterogeneity. Overall, our observations illustrate the importance of individual pension plans and show which characteristics are important for customized design.