Title:  Are older people aware of their cognitive decline? Misperception and financial decision making

Speaker：Fabrizio Mazzonna，Università della Svizzera italiana

Time: Nov.5, 15：00 – 16：30 (Beijing Time)

About the Speaker:

Fabrizio Mazzonna is an economist and a tenured Associated Professor in the department of Economics of Università della Svizzera Italiana (USI) in Lugano, Switzerland. He also serves as the director of Center for Economic and Political research on aging (CEPRA). After earning his PhD in Econometrics from University of Rome Tor Vergata in 2011, he worked as post-doc at the Munich Center of Economics of Ageing (MEA) at the Max Planck Institute before moving to Lugano in 2013.

He is one of the founders and currently board member of the Swiss Society of Health Economics (SGGÖ). In 2017 he started a collaboration with the National Bureau of Economic Research (NBER) for the organization of a yearly US-European workshop on “Aging and Health”.

Abstract：

We investigate whether older people correctly perceive their own cognitive decline, and the potential financial consequences of misperception. First, we provide evidence that older people tend to underestimate their cognitive decline. We then show that those who experience a severe cognitive decline, but are unaware of it, are more likely to suffer wealth losses compared to those who are aware or did not experience a severe decline. These losses largely reflect decreases in financial wealth and are mainly experienced by wealthier people who were previously active on the stock market. Our findings support the view that financial losses among older people unaware of their cognitive decline are the result of bad financial decisions, not of rational disinvestment strategies.