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Jie Ding

First Name: Jie
Surname: Ding
Department Dept of Economics
Supervisor(s): Professor Geoff Kingston , Doctor Sachi purcal

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Paper Title

Australian retirees' preferences between consumption, government pension, bequest and housing


Develop and calibrate a utility model with realistic assumptions to model the financial behaviours of Australian retirees


A semi-analytical solution allows the utility parameters to be effectively calibrated to ABS data. While previous researches require assumptions on many model parameters.

Key literature/theoretical perspective

  • Suitable form of utility function and dynamic programming methods.
  • Empirical studies in Australian and overseas on retiree’s preferences on consumption, housing and bequest.


With data analysis and literature review, develop an utility model that is theoretically sound and mathematically feasible -> calibrate the model to ABS data -> review the model -> repeat


The calibrated model reasonably explains the financial behaviour of the households surveyed in the ABS data.

Research limitations/implications

This research attempts to model the financial behaviour of Australians in average. However the assumption that a single utility function with a particular set of parameters is applicable for everyone, suffers from the lack of variability.

Practical and Social implications

  • Knowing the financial preference of Australian retirees helps with financial planning in practice.
  • We can model people’s reaction to a certain change in public policy, if we assume the change in modelled behaviour will be similar to the change in their actual behaviour.


Utility, financial planning, dynamic programming, age pension