An Economic Model of Mortality Salience in Personal Financial Decision Making: Applications to Annuities, Life Insurance, Charitable Gifts, Estate Planning, Conspicuous Consumption, and Healthcare
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Authors
James, Russell N.
Issue Date
2016
Type
Article
Language
en_US
Keywords
mortality salience , terror management theory , annuities , life insurance , charitable gifts , healthcare , estate planning
Alternative Title
Abstract
The study of personal mortality salience and the denial of death have a long history in psychology leading to the modern field of Terror Management Theory. However, a simple consumer utility function predicts many of the outcomes identified in experimental research in this field. Further, this economic approach explains a range of otherwise unexpected financial decision-making behaviors in areas as diverse as annuities, life insurance, charitable gifts and bequests, intra-family gifts and bequests, conspicuous consumption, and healthcare. With its relevance to such a wide range of personal financial decisions, understanding the impact of mortality salience can be particularly useful to advisors in related fields.
Description
Citation
James, R. N. (2016). An Economic Model of Mortality Salience in Personal Financial Decision Making: Applications to Annuities, Life Insurance, Charitable Gifts, Estate Planning, Conspicuous Consumption, and Healthcare. Journal of Financial Therapy, 7 (2) 5. https://doi.org/10.4148/1944-9771.1122