The Vanguard Research Initiative (VRI) uses innovative “strategic survey questions” to understand contingent behaviors and improve understanding of dynamic behavior. Current applications are to household finance, but the potential is unlimited. The VRI is a collaboration of the University of Michigan, New York University, and Vanguard. It’s an initiative to understanding the spending, portfolio, work, and insurance choices of americans at age 55 and above. Three surveys have been completed:
- Survey 1 (wealth measurement)
- Survey 2 (Strategic Survey Questions, Annuities, and Long Term Care)
- Survey 3 (Family and Spending) have been completed, as have three papers
Three papers have been completed:
- Long Term Care Utility and Late in Life Savings: Older wealthholders spend down assets slowly. Is this more due to bequest motives or high long-term care costs? Using new Strategic Survey Questions (SSQs) that elicit stated preferences we find that long term care costs are significantly more important for the majority of wealth holders.
- Long Term Care Insurance, Annuities, and Late in Life Savings: We provide alternative estimates of demand for improved long term care insurance. One is model-based, the other is based on direct stated preference. Model-based demand is significantly higher. The analogous result holds for actuarially fair annuities. Patterns in the gap between model-implied and stated demands point to the importance of family transfers.
- The Wealth of Wealth-Holders: Summarizes the VRI panel and their portfolio holdings with confirmation of accuracy.
For more information and for paper downloads, visit the Vanguard Research Initiative website.
Strategic survey questions were introduced in:
“The Joy of Giving or Assisted Living?”, with John Ameriks, Steven Laufer, Stijn van Niewerburgh, Journal of Finance, 2011, which introduces and establishes the importance of “public care aversion,” retiree aversion to simultaneously running out of wealth and being in need of long term care.
Earlier survey-based research on household wealth accumulation includes:
“Wealth Accumulation and the Propensity to Plan,” with John Ameriks and John Leahy, Quarterly Journal of Economics, 118, 1007—1047, 2003, which shows that planning and budgeting skills may be of great value in the process of wealth accumulation.
“Measuring Self Control Problems,” with John Ameriks, John Leahy, and Tom Tyler, American Economic Review, vol.97, 966-972, 2007, which identified a new class of self control problems in which individuals find it difficult to spend rather than to save.