Rounding Probabilistic Expectations in Surveys: A Comparison of the Subjective Probabilities of Living between U.S. and European Residents

In this paper, I investigate the rounding behavior of U.S. and European residents when they are asked to state their subjective probabilities of living till certain ages. By interpreting subjective probabilities as rounded values, I transform them into interval data and further perform an empirical analysis examining the differences of the predictions of expected survival probabilities between U.S. and European residents. The results show that compared to U.S residents, Europeans tend to have larger extent of rounding when reporting probabilities, but their extent of rounding narrows down overtime. Besides, European residents are more optimistic about living a long life than U.S. residents with higher estimated subjective probabilities of living, and the predictions of expected probability of living are consistent with the actual life expectancies in U.S and European Union.