Differences between subjective and predicted survival probabilities and their relation to preventive care use

Abstract

I analyse how differences between subjective and predicted survival probabilities are related to preventive healthcare use. Based on the Health and Retirement Study, I find that private information inherent in subjective survival probability affects the decisions on preventive care use: positive and negative deviations between the subjective and predicted survival probabilities both imply lower likelihood of use, the relations with negative deviations being stronger. These results are driven by perceptions verified by later survival and health outcomes. A theoretical model provides explanation for the empirical results, in which preventive care increases the chances of survival, but the benefits of preventive care also vary with the survival probability.