Journal of Economic Literature
Book Reviews
2026-09-01
Michael Hurd of RAND and NBER reviews “The Economic Theory of Annuities” by Eytan Sheshinski,. The EconLit Abstract of the reviewed work begins “Presents a theoretical analysis of the functioning of private annuity markets. Discusses benchmark calculations--savings and retirement; survival functions, stochastic dominance, and changes in longevity; a life cycle model with longevity risk--first best and competitive equilibrium; comparative statistics, discounting, partial annuitization, and no annuities; subjective beliefs and survival probabilities; moral hazard; uncertain future survival functions; pooling equilibrium and adverse selection; income uncertainty; life insurance and differentiated annuities; annuities, longevity, and aggregate savings; utilitarian pricing of annuities; optimum taxation in pooling equilibria; bundling of annuities and other insurance products; and financial innovation--refundable annuities (annuity options). Sheshinski is Sir Isaac Wolfson Professor of Public Finance at Hebrew University. Index.”