An experimental test on dynamic consumption and lump-sum pensions

Abstract

This article examines the potential risks on consumption behavior of lumpsum payments. As a pension, lump-sum payments could be consumed too fast and generate an increase of poverty rates. We experimentally investigate consumption behavior in an inter-temporal decision-making setting. Subjects make consumption and saving decisions in an environment with two central features: first, there exists a decreasing probability of survival; and second, in addition to the regular income they get while active, they receive a unique lump-sum payment when retired. The results of this experiment show that rather than consuming too much during their income periods, subjects show a persistent precautionary saving behavior and over-save in the vast majority of periods. This result seems to be mainly driven by the risk averse individuals.We thank people from CREED (Amsterdam) for helpful comments during the elaboration of the experimental design and seminar participants at Malaga, Tucson, Granada and Rome. Financial support from the Spanish Ministry of Education and Science (SEJ2009-11117/ECON) and Junta de Andalucía (P07-SEJ-03261) is gratefully acknowledged. Electronic supplementary material The online version of this article

Economía aplicada: ensayos de investigación económica 2017

“…En segundo lugar, ya más específicamente acerca de mecanismos de conservación de las fortunas y maneras de asegurar una vejez sin problemas, señala que estos consistían en realizar gastos en un monto menor que su renta, para así asegurarse una holgura durante la ancianidad o tras el fallecimiento de la cabeza de familia. Fatas, Lacomba, Lagos & Moro-Egido (2013) condujeron un experimento en España con el objetivo de examinar los riesgos potenciales sobre el consumo del pago a suma alzada por retiro del fondo de pensiones. Como se pensaba que el dinero recibido sería gastado rápidamente y ello aumentaría los índices de pobreza, investigaron experimentalmente el consumo en un entorno de toma de decisiones intertemporales.…”