Consumer preferences and demand for annuities: Evidence from Hong Kong

Siu Yau LEE, Kee Lee CHOU, Wai-Sum CHAN, Hans VAN KIPPERSLUIS

Research output: Contribution to journalArticle

Abstract

Retirees without annuities in Hong Kong confront longevity and investment risks. Despite these risks, there is very limited uptake of annuities. This study identifies product and consumer characteristics that are associated with the demand for annuities in Hong Kong. We conduct a discrete choice experiment and distribute a consumer survey among two independent representative samples of workers aged between 40 and 64. Results suggest that a fixed monthly income and a 10-year guarantee period are two significant product characteristics, while a bequest motive, being married, and an understanding of the annuity are consumer characteristics that are associated with the demand for annuities. Being presented the optimal hypothetical annuity product, approximately one-third of middle-aged workers choose to annuitize their retirement savings. The findings and methods of this study can be applied for designing annuity products in other contexts. Copyright © 2018 Taylor & Francis.
Original languageEnglish
Pages (from-to)170-188
JournalJournal of Aging and Social Policy
Volume31
Issue number2
Early online dateNov 2018
DOIs
Publication statusPublished - 2019

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Hong Kong
Retirement
demand
evidence
worker
retiree
retirement
savings
guarantee
income
Consumer Behavior
experiment
Surveys and Questionnaires

Bibliographical note

Lee, S.-Y., Chou, K.-L., Chan, W.-S., & van Kippersluis, H. (2019). Consumer preferences and demand for annuities: Evidence from Hong Kong. Journal of Aging and Social Policy, 31(2), 170-188. doi: 10.1080/08959420.2018.1542242

Keywords

  • Annuity
  • Demand
  • Middle-aged workers
  • Chinese