Longevity Expectations and Death: Can People Predict Their Own Demise?

Abstract

Many economists are convinced that when individuals are asked to formulate probabilities they are unlikely to do it correctly (Mark J. Machina, 1990). However, the same analysts would likely add that people do have a reasonably articulated, but biased, internal scale for risk perceptions. As a result, the extent of bias in these subjective perceptions has been an important unresolved issue. For the most part, the available evidence on these issues stems from simple laboratory experiments and comparisons of subjective and expert risk assessments for a diverse array of activities (Baruch Fischhoff et al., 1993). Current public policy associated with many different sources of risk relies on consumer sovereignty and implicitly trusts that these biases in risk perception will not be great. Until recently there has been no opportunity to test this question outside the setting of laboratory experiments.