The Pivotal Role of Fairness: Which Consumers Like Annuities? / Suzanne B. Shu, Robert Zeithammer, John W. Payne.

Format:

Book

Author/Creator:

Shu, Suzanne B.

Contributor:

National Bureau of Economic Research.

Zeithammer, Robert.

Payne, John W.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25067.

NBER working paper series no. w25067

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Pivotal Role of Fairness

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

Life annuities can be a valuable component of the decumulation stage of wealth during retirement. While economists argue that most retirees should annuitize, actual demand in the marketplace is low. We analyze data from two studies to determine how measurable individual differences among consumers affect their interest in annuities. We find that a relatively high percentage of respondents dislike all annuities. Demographic factors are not predictive of which individuals dislike annuities, and individual factors predicted by economic models to be important (such as beneficiaries) have small or even opposite effects. The strongest individual differences we measured that predicts liking of annuities is the respondent's perception of product fairness. We discuss implications of our findings for financial planners hoping to help their customers with these decumulation challenges.

Notes:

Print version record

September 2018.