Consumer Preferences and Demand for Annuities: Evidence From Hong Kong

Siu Yau Lee*, Kee Lee Chou, Wai Sum Chan, Hans van Kippersluis

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

3 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)170-188
Number of pages19
JournalJournal of Aging and Social Policy
Volume31
Issue number2
Early online date15 Nov 2018
DOIs
Publication statusPublished - 15 Mar 2019

Scopus Subject Areas

  • Demography
  • Gerontology
  • Life-span and Life-course Studies

User-Defined Keywords

  • Annuity
  • Chinese
  • demand
  • middle-aged workers

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