TY  - JOUR
AU  - Ameriks,John
AU  - Caplin,Andrew
AU  - Laufer,Steven
AU  - Nieuwerburgh,Stijn Van
TI  - The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13105
PY  - 2007
Y2  - May 2007
UR  - http://www.nber.org/papers/w13105
L1  - http://www.nber.org/papers/w13105.pdf
N1  - Author contact info:
John Ameriks
John Ameriks
The Vanguard Group, Inc.
PO Box 2600, MS V36
Valley Forge PA 19482
Tel: 610-503-5676
Fax: 610-503-5690
E-Mail: john_ameriks@vanguard.com

Andrew Caplin
Department of Economics
New York University
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8950
Fax: 212/995-3932
E-Mail: andrew.caplin@nyu.edu

Steven M. Laufer
Department of Economics New York University
19 W. 4th Street, 6FL
New York, NY 10012
E-Mail: sml8@nyu.edu

Stijn Van Nieuwerburgh
Stern School of Business
New York University
44 W 4th Street, Suite 9-120
New York, NY 10012
Tel: 646/284-4141
Fax: 646/284-4141
E-Mail: svnieuwe@stern.nyu.edu
AB  - Strong bequest motives can explain low retirement spending, but so equally can strong precautionary motives. Given this identification problem, the recent tradition has been largely to ignore bequest motives. We develop a rich model of spending in retirement that allows for both motives, and introduce a "Medicaid aversion" parameter that plays a key role in determining precautionary savings.  We implement a "strategic" survey to resolve the identification problem between bequest and precautionary motives. We find that strong bequest motives are too prevalent to be ignored. Moreover, Medicaid aversion is widespread, and helps explain the low spending of many middle class retirees.
ER  -