Pension Demand and Utility: The Life Annuity Puzzle
Journal Title: Finance a uver - Year 2014, Vol 64, Issue 3
Abstract
This paper shows by means of the concept of utility that annuitization through life annui-ties or a pension can be an efficient instrument for the economic assurance of seniors. Various quantitative arguments are presented supporting this statement (e.g. annuity equivalent wealth [AEW] is calculated using Czech data). In conclusion, some practical arguments are mentioned regarding why the real demand on life annuities contradicts this result so that a so-called annuity puzzle arises in pension practice.
Authors and Affiliations
Tomas Cipra
Keywords
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- EP ID EP297449
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