TY  - RPRT
        AU  - Mazzonna, Fabrizio
AU  - Peracchi, Franco
        TI  - Are Older People Aware of Their Cognitive Decline? Misperception and Financial Decision Making
        PY  - 2020/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 13725
        UR  - https://www.iza.org/publications/dp13725
        AB  - We investigate whether older people correctly perceive their own cognitive decline, and the potential financial consequences of misperception. First, we document the fact that older people tend to underestimate their cognitive decline. We then show that those who experienced 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.
        KW  - aging
KW  - cognitive ability
KW  - household finance
KW  - HRS
        ER  -