Work

Precise or Imprecise Probabilities? Evidence from Survey Response on Late-onset Dementia

Year: 2019

Type: report

Abstract: We elicit numerical expectations for late-onset dementia in the Health and Retirement Study.Our elicitation distinguishes between precise and imprecise probabilities, while accounting for rounding of reports.Respondents quantify imprecision using probability intervals.Nearly half of respondents hold imprecise dementia probabilities, while almost a third of precise-probability respondents round their reports.We provide the first empirical evidence on dementia-risk perceptions among dementia-free older Americans and novel evidence about imprecise probabilities in a nationally-representative sample.We show, in a specific framework, that failing to account for imprecise or rounded probabilities can yield incorrect predictions of long-term care insurance purchase decisions.

Source: National Bureau of Economic Research

DOI: 10.3386/w26125

Authors: Pamela Giustinelli, Charles Manski, Francesca Molinari

Institutions: Northwestern University, National Bureau of Economic Research, Bocconi University, Cornell University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

SDG: Good health and well-being

Open Access status: green

Funders: National Science Foundation, University of Michigan, National Institute on Aging