Consumer Preferences and Demand for Annuities: Evidence From Hong Kong
Siu-Yau Lee1, Kee-Lee Chou2, Wai-Sum Chan3
1a Associate Professor, Department of Asian and Policy Studies , The Education University of Hong Kong , Hong Kong.
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.
Related Concept Videos
The Evidence for Evolution
Applications of Integration to Find Consumer Surplus
Natural Selection and Mating Preferences
Females, due to their biological roles in conception, pregnancy, and nursing,...
Reason and Intuition
Self-Presentation: Self-Monitoring and Self-Handicapping
Ecological Niches


