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Changes in subjective mortality expectations and saving during COVID-19 pandemic: Empirical analysis using questionnaire data in Japan

Tomoko Kinugasa, Kobe University
Kouhei Masumoto, Kobe University
Koji Yasuda, Aomori Public University and Kobe University
Kazufumi Yugami, Kobe University
Shigeyuki Hamori, Kobe University

The threat of COVID-19 may lead people to feel that they are likely to die in the near future. This research investigates how COVID-19 has influenced subjective mortality expectations and saving behavior. We conducted a questionnaire with 2500 individuals aged 20 to 79 years in Japan who were working or whose spouses were working in January 2021. The questions regarded the change in subjective mortality due to the COVID-19 pandemic and share of saving in the respondents’ income in 2020, as well as several basic informational aspects. We empirically analyzed the effect of the increase in subjective mortality on saving using questionnaire response data. According to the aggregation of questionnaire, 33% of individuals felt that the possibility that they would die in several years increased due to the prevalence of COVID-19. Our empirical results, based on an instrumental variable method considering the endogeneity of subjective mortality, showed that increases in subjective mortality expectations due to COVID-19 have decreased saving. Hence, the COVID-19 pandemic has increased individuals’ subjective mortality to a certain extent, which has decreased saving motivation. We also found that the experience of large accidents negatively affects saving, but that of disaster does not significantly affect it.

Keywords: Economic analysis, Longevity, Mortality, Econometrics

See extended abstract.

  Presented in Session P11.