Marco Angrisani

Measuring household spending and payment habits: the role of “typical” and “specific” time frames in survey questions

We designed and fielded an experimental module in the American Life Panel (ALP) where we ask individuals to report the number of their purchases and the amount paid by debit cards, cash, credit cards, and personal checks. The design of the experiment features several stages of randomization. First, three different groups of sample participants are randomly assigned to an entry month (July, August, or September, 2011) and are to be interviewed four times during a year, once every quarter. Second, for each method of payment a sequence of questions elicits spending behavior during a day, week, month, and year. At the time of the first interview, this sequence is randomly assigned to refer to “specific” time spans or to “typical” time spans. In all subsequent interviews, a “specific” sequence becomes a “typical” sequence and vice versa. In this paper, we analyze the data from the first wave of the survey. We show that the type— specific or typical— and length of recall periods greatly influence household reporting behavior.

No-Trade in the Laboratory

We construct laboratory financial markets in which subjects can trade an asset whose value is unknown. Subjects receive private clues about the asset value and then set bid and ask prices at which they are willing to buy or to sell from the other participants. In some of our markets (experimental treatments), there are gains from trade, while in others there are no gains: trade is zero sum. Celebrated no-trade theorems state that differences in private information alone cannot explain trade in the zero sum case. We study whether purely informational trade is eliminated in our experimental markets with no gains. The comparison of our results for gains and no-gains treatments shows that subjects fail to reach the no-trade outcome by pure introspection, but they approach it over time through market feedback and learning. Furthermore, the less noisy the clue-asset relationship is, the closer trade comes to being eliminated entirely.

Labor Force Transitions at Older Ages: The Roles of Work Environment and Personality

Besides compensation and financial incentives, several other work-related factors may affect individual retirement decisions. Specifically, job characteristics such as autonomy, skill variety, task significance and difficulty, stress and physical demands, peer pressure and relations with co-workers, play a crucial role in determining psychological commitment to work at older ages. While financial preparedness for retirement and health shocks are often cited as main predictors of the choice to exit the labor force, there exists relatively little research documenting the extent to which the work environment itself and its interaction with economic variables influence retirement decisions. We document that job characteristics are associated with labor force transitions at older ages, in particular transitions to retirement and part-time employment. Additionally, we show that while personality traits do not directly drive labor force transitions, the effect of job characteristics on labor supply outcomes varies with the “intensity” of personality traits. We also document that job characteristics themselves are strongly related to personality traits. This suggests that, depending on their personality, individuals may select into specific jobs, whose characteristics ultimately shape their retirement paths.

The Effect of Housing and Stock Wealth Losses on Spending in the Great Recession

We use panel data at the household level on a complete inventory of household spending and assets to estimate the spending response to the sharp and largely unexpected declines in house and stock market prices that occurred in the Great Recession. Our data span the period 2001-2011, so that we are able to separate trends in spending from innovations in response to unexpected wealth change. We find the marginal propensity to consume out of an unexpected housing wealth change to be seven cents per dollar, and about four cents per dollar out of financial wealth.

Personality and Employment Transitions at Older Ages: Direct and Indirect Effects Through Non‐Monetary Job Characteristics

We study whether individuals with different personality traits systematically exhibit different retirement trajectories. We find weak direct associations between personality and employment transitions. On the other hand, personality does contribute indirectly to these transitions by moderating the effects of non-monetary job characteristics. Specifically, workers with different traits are observed to follow different retirement paths when faced with similar physical demands, computer skills requirements, job flexibility and age discrimination in the workplace. Contrary to other economic domains, conscientiousness does not have the strongest association with retirement; the other components of the Big Five personality traits show more salient patterns.

Nonmonetary Job Characteristics and Employment Transitions at Older Ages

This paper studies to what extent job characteristics such as physical and cognitive demands, use of technologies, responsibility, difficulty, stress, peer pressure, and relations with co-workers are related to full or partial retirement. We study employment transitions and retirement expectations of older workers by exploiting the wealth of information about individuals older than age 50 in the Health and Retirement Study (HRS), and characteristics of different occupations provided by the Occupation Information Network (O*NET) database. Controlling for basic demographics, wages, benefits, health, cognitive ability, personality, and other personal characteristics, we find strong and statistically significant relationships between labor force transitions and job characteristics. These relationships are typically more pronounced and more precisely estimated when we use objective job attributes taken from the O*NET than when we use self-reported job characteristics taken from the HRS, but self-reported characteristics are more strongly related to moves from full-time to part-time employment. Using expected retirement age or subjective probabilities of working full-time at older ages gives similar results to using actual labor force transitions as the dependent variable. The estimated effects of job characteristics are again stronger and more robust to alternative specifications when measures of job attributes are taken from the O*NET than from the HRS. Our findings suggest that nonmonetary job characteristics are important determinants of labor supply decisions at older ages, but our analysis is still preliminary in its attempt to uncover causal relationships: Unobservable individual characteristics responsible for sorting into specific occupations may also shape retirement decisions.

Cross-country comparisons of disability and morbidity: evidence from the Gateway to Global Aging Data

Abstract Background International comparisons of disease prevalence have been useful in understanding what proportion of disease might be preventable and in informing potential policy interventions in different cultural and economic contexts. Using newly available, harmonized data from 20 countries, we compare disability and morbidity of older adults between the ages of 55 and 74. Methods The Gateway to Global Aging Data, a data and information portal, provides access to easy-to-use individual-level longitudinal data from 10 surveys covering over 30 countries. Exploiting harmonized measures available from the Gateway, we descriptively examine how disability and morbidity differ across countries. Results Significant cross-country differences are observed for several health indicators. Comparing countries with the highest and lowest prevalence rates, we observe that hypertension rates vary twofold and stroke rates vary threefold, while disability and arthritis rates vary more than fivefold. Among women, higher gross domestic product and life expectancy are related to lower diabetes, heart disease, and better functioning. Among men, national indicators of economic conditions are not significantly associated with reported disease prevalence. Conclusions We document substantial heterogeneity in disability and morbidity across countries, separately for men and women and after controlling for population age composition and education. Rich data from various surveys across the world offers remarkable opportunities for cross-country analyses, calling for further investigation of what drives observed differences. The Gateway to Global Aging Data provides easy-to-use harmonized data files and tools to facilitate this type of research.

The 2016 and 2017 Surveys of Consumer Payment Choice: Technical Appendix

This document serves as the technical appendix to the 2016 and 2017 Surveys of Consumer Payment Choice administered by the Dornsife Center for Economic and Social Research (CESR). The Survey of Consumer Payment Choice (SCPC) is an annual study designed primarily to collect data on attitudes toward and use of various payment instruments by consumers over the age of 18 in the United States. The main report, which introduces the survey and discusses the principal economic results, can be found at frbatlanta.org/banking-and-payments/consumer-payments/survey-of-consumer-paymentchoice. In this data report, we detail the technical aspects of the survey design, implementation, and analysis. JEL classification: D12, D14, E4

Investment Decisions in Retirement: The Role of Subjective Expectations

The rapid transition from defined benefit (DB) pension plans to defined contribution (DC) plans has a potential benefit of offering pension holders greater control over how their pension accumulations are invested. If pension holders are willing to take some risk, investments in the stock market could increase their economic preparation for retirement, and, indeed, economic theory as well as the typical advice of financial advisors calls for stock market investments. Yet, the rate of stock holding is much below what theory suggests it should be, undoing any benefit associated with the greater control coming from DC plans. The leading explanations for this under-investing include excessive risk aversion, costs of entry, and misperceptions about possible returns in the stock market. We show that excessive risk aversion is not able to account for the low fraction of stock holding. However, a model with heterogeneous subjective expectations about stock market returns is able to account for low stock market participation, and tracks the share of risky assets conditional on participation reasonably well. Based on the model with subjective expectations, we estimate a welfare loss of up to 12% compared to investment under rational expectations, if actual returns follow the same distribution as in the past 50 years. The policy implication is that there is considerable scope for welfare improvement as a result of consumer education regarding stock market returns. However, the welfare loss is much smaller if individuals are not very risk averse or if actual returns follow the same distribution as in the past 10 years.