College of Integral Studies, Abdullah Al Salem University, Khaldiya, Kuwait.
College of Business and Entrepreneurship, Abdullah Al Salem University, Khaldiya, Kuwait.
PLoS One. 2024 Aug 27;19(8):e0307379. doi: 10.1371/journal.pone.0307379. eCollection 2024.
We make a novel investigation of welfare costs associated with various suboptimal decisions made by retirees, both analytically and numerically. We utilize a unique framework that incorporates recursive utility with housing, and also encompasses expected utility and recursive utility without housing as special cases. Our findings indicate that under-investment in stocks incurs lower welfare costs compared to an equivalent over-investment. Suboptimal allocations in bond holdings result in higher costs than similar misallocations in stocks. Choosing not to participate in the stock market is less detrimental than avoiding the bond market. Should retirees opt to simplify their decision-making by investing solely in one type of asset, it is less costly for them to invest exclusively in bonds. Overconsumption of housing is less costly than an equivalent underconsumption. Suboptimal consumption imposes the highest welfare cost. Decisions regarding consumption, housing, and savings are found to be more crucial than the choice of how to distribute liquid savings between stocks and bonds. Additionally, recursive utility model better captures retirees' preference for bonds over stocks than expected utility model. Our results, which are consistent across various parameter settings, provide valuable insights for academics and policymakers aiming to enhance retiree welfare.
我们从理论和数值两个方面对退休人员做出的各种次优决策所带来的福利成本进行了新的研究。我们利用了一个独特的框架，该框架将住房纳入了递归效用，同时也将期望效用和无住房的递归效用作为特例包含在内。我们的研究结果表明，与等价的过度投资相比，股票投资不足会带来更低的福利成本。债券持有量的次优配置会导致更高的成本，而类似的股票配置不当则不会。选择不参与股票市场的成本低于避免债券市场的成本。如果退休人员选择通过仅投资一种类型的资产来简化决策，那么他们投资于债券的成本更低。过度消费住房的成本低于同等程度的住房消费不足。次优消费带来的福利成本最高。研究发现，消费、住房和储蓄方面的决策比如何在股票和债券之间分配流动资产更为重要。此外，递归效用模型比期望效用模型更能捕捉退休人员对债券的偏好超过对股票的偏好。在各种参数设置下，我们的结果都是一致的，为旨在提高退休人员福利的学者和政策制定者提供了有价值的见解。
