Discounting health and money: New evidence using a more robust method
Tóm tắt
This study compares discounting for money and health in a field study. We applied the direct method, which measures discounting independent of utility, in a representative French sample, interviewed at home by professional interviewers. We found more discounting for money than for health. The median discount rates (6.5% for money and 2.2% for health) were close to market interest rates, suggesting that at the aggregate level the direct method solves the puzzle of unrealistically high discount rates typically observed in applied economics. Constant discounting fitted the data better than the hyperbolic discounting models that we considered. The substantial individual heterogeneity in discounting was correlated with age and occupation.
Tài liệu tham khảo
Abdellaoui, M., Attema, A. E., & Bleichrodt, H. (2010). Intertemporal tradeoffs for gains and losses: An experimental measurement of discounted utility. Economic Journal, 120, 845–866.
Abdellaoui, M., Bleichrodt, H., & L’Haridon, O. (2013). Sign-dependence in intertemporal choice. Journal of Risk and Uncertainty, 47(3), 225–253.
Ahlbrecht, M., & Weber, M. (1997). An empirical study on intertemporal decision making under risk. Management Science, 43(6), 813–826.
Anderson, L. R., & Stafford, S. L. (2009). Individual decision-making experiments with risk and intertemporal choice. Journal of Risk and Uncertainty, 38(1), 51–72.
Andreoni, J., & Sprenger, C. (2012). Estimating time preferences from convex budgets. American Economic Review, 102(7), 3333–3356.
Angeletos, G., Laibson, D., Repetto, A., Tobacman, J., & Weinberg, S. (2001). The hyperbolic consumption model: Calibration, simulation, and empirical evaluation. Journal of Economic Perspectives, 15(3), 47–68.
Attema, A. E. (2012). Developments in time preference and their implications for medical decision making. Journal of the Operational Research Society, 63(10), 1388–1399.
Attema, A. E., & Brouwer, W. B. (2012). A test of independence of discounting from quality of life. Journal of Health Economics, 31(1), 22–34.
Attema, A. E., Bleichrodt, H., & Wakker, P. P. (2012). A direct method for measuring discounting and QALYs more easily and reliably. Medical Decision Making, 32(4), 583–593.
Attema, A. E., Bleichrodt, H., Gao, Y., Huang, Z., & Wakker, P. P. (2016). Measuring discounting without measuring utility. American Economic Review, 106(6), 1476–1494.
Baucells, M., & Heukamp, F. (2011). Probability and time tradeoff. Management Science, 58, 831–842.
Becker, G. S., & Mulligan, C. B. (1997). The endogenous determination of time preference. Quarterly Journal of Economics, 112(3), 729–758.
Bleichrodt, H., & Johannesson, M. (2001). Time preference for health: A test of stationarity versus decreasing timing aversion. Journal of Mathematical Psychology, 45(2), 265–282.
Bleichrodt, H., Rohde, K. I. M., & Wakker, P. P. (2009). Non-hyperbolic time inconsistency. Games and Economic Behavior, 66(1), 27–38.
Bleichrodt, H., Gao, Y., & Rohde, K. I. M. (2016). A measurement of decreasing impatience for health and money. Journal of Risk and Uncertainty, 52(3), 213–231.
Bostic, R., Herrnstein, R. J., & Luce, R. D. (1990). The effect on the preference reversal of using choice indifferences. Journal of Economic Behavior and Organization, 13(2), 193–212.
Bosworth, R., Cameron, T. A., & DeShazo, J. (2015). Willingness to pay for public health policies to treat illnesses. Journal of Health Economics, 39, 74–88.
Cairns, J. A. (1992). Health, wealth and time preference. Project Appraisal, 7(1), 31–40.
Cairns, J. (1994). Valuing future benefits. Health Economics, 3(4), 221–229.
Chao, L. W., Szrek, H., Pereira, N. S., & Pauly, M. V. (2009). Time preference and its relationship with age, health, and survival probability. Judgment and Decision Making, 4(1), 1–19.
Chapman, G. B. (1996). Temporal discounting and utility for health and money. Journal of Experimental Psychology: Learning Memory and Cognition, 22(3), 771–791.
Chapman, G. B., & Elstein, A. S. (1995). Valuing the future temporal discounting of health and money. Medical Decision Making, 15(4), 373–386.
Claxton, K., Paulden, M., Gravelle, H., Brouwer, W., & Culyer, A. J. (2011). Discounting and decision making in the economic evaluation of health-care technologies. Health Economics, 20(1), 2–15.
Coller, M., & Williams, M. B. (1999). Eliciting individual discount rates. Experimental Economics, 2(2), 107–127.
Courtemanche, C., Heutel, G., & McAlvanah, P. (2015). Impatience, incentives and obesity. Economic Journal, 125(582), 1–31.
Cropper, M. L., Aydede, S. K., & Portney, P. R. (1992). Rates of time preference for saving lives. American Economic Review, 82, 469–472.
Cropper, M. L., Aydede, S. K., & Portney, P. R. (1994). Preferences for life saving programs: How the public discounts time and age. Journal of Risk and Uncertainty, 8(3), 243–265.
DeHart, W. B., & Odum, A. L. (2015). The effects of the framing of time on delay discounting. Journal of the Experimental Analysis of Behavior, 103(1), 10–21.
Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the economic evaluation of health care programmes. Oxford: Oxford University Press.
Ebert, J. E. J., & Prelec, D. (2007). The fragility of time: Time-insensitivity and valuation of the near and far future. Management Science, 53(9), 1423–1438.
Enzler, H. B., Diekmann, A., & Meyer, R. (2014). Subjective discount rates in the general population and their predictive power for energy saving behavior. Energy Policy, 65, 524–540.
Epper, T., Fehr-Duda, H., & Bruhin, A. (2011). Viewing the future through a warped lens: Why uncertainty generates hyperbolic discounting. Journal of Risk and Uncertainty, 43(3), 169–203.
Franck, C. T., Koffarnus, M. N., House, L. L., & Bickel, W. K. (2015). Accurate characterization of delay discounting: A multiple model approach using approximate Bayesian model selection and a unified discounting measure. Journal of the Experimental Analysis of Behavior, 103(1), 218–233.
Frederick, S. (2003). Measuring intergenerational time preference: Are future lives valued less? Journal of Risk and Uncertainty, 26(1), 39–53.
Frederick, S., Loewenstein, G. F., & O’Donoghue, T. (2002). Time discounting and time preference: A critical review. Journal of Economic Literature, 40(2), 351–401.
Frederick, S., Read, D., & LeBoeuf, R. (2008). When I’m 64: Temporal referencing and discount rates. NA-Advances in Consumer Research, 35, 55–58.
Freeman, D., Manzini, P., Mariotti, M., & Mittone, L. (2016). Procedures for eliciting time preferences. Journal of Economic Behavior & Organization, 126, 235–242.
Gilboa, I. (1989). Expectation and variation in multi-period decisions. Econometrica, 57(5), 1153–1169.
Gravelle, H., & Smith, D. (2001). Discounting for health effects in cost-benefit and cost-effectiveness analysis. Health Economics, 10(7), 587–599.
Hammitt, J. K., & Robinson, L. A. (2011). The income elasticity of the value per statistical life: Transferring estimates between high and low income populations. Journal of Benefit-Cost Analysis, 2(01), 1–29.
Hardisty, D. J., & Weber, E. U. (2009). Discounting future green: Money versus the environment. Journal of Experimental Psychology: General, 138(3), 329–340.
Hardisty, D. J., Thompson, K. F., & Krantz, D. H. (2013). How to measure time preferences: An experimental comparison of three methods. Judgment and Decision Making, 8(3), 236–249.
Harrison, G. W., Lau, M. I., & Williams, M. B. (2002). Estimating individual discount rates in Denmark: A field experiment. American Economic Review, 92(5), 1606–1617.
Harvey, C. M. (1995). Proportional discounting of future costs and benefits. Mathematics of Operations Research, 20(2), 381–399.
Jeffreys, H. (1961). Theory of probability. Oxford: Clarendon Press.
Johnson, M. W., & Bickel, W. K. (2002). Within-subject comparison of real and hypothetical money rewards in delay discounting. Journal of the Experimental Analysis of Behavior, 77(2), 129–146.
Keller, L. R., & Strazzera, E. (2002). Examining predictive accuracy among discounting models. Journal of Risk and Uncertainty, 24(2), 143–160.
Kirby, K. N. (1997). Bidding on the future: Evidence against normative discounting of delayed rewards. Journal of Experimental Psychology: General, 126(1), 54–70.
Kirby, K. N., & Marakovic, N. N. (1995). Modelling myopic decisions: Evidence for hyperbolic delay-discounting within subjects and amounts. Organizational Behavior and Human Decision Processes, 64(1), 22–30.
Laibson, D. (1997). Golden eggs and hyperbolic discounting. Quarterly Journal of Economics, 112(2), 443–477.
Loewenstein, G. F., & Prelec, D. (1992). Anomalies in intertemporal choice: Evidence and an interpretation. Quarterly Journal of Economics, 107(2), 573–597.
Loewenstein, G. F., & Prelec, D. (1993). Preferences for sequences of outcomes. Psychological Review, 100(1), 91–108.
MacKeigan, L. D., Larson, L. N., Draugalis, J. R., Bootman, J. L., & Burns, L. R. (1993). Time preference for health gains versus health losses. PharmacoEconomics, 3(5), 374–386.
Mackenbach, J. P., Kunst, A. E., Cavelaars, A. E., Groenhof, F., & Geurts, J. J. (1997). Socioeconomic inequalities in morbidity and mortality in Western Europe. The EU Working Group on socioeconomic inequalities in health. The Lancet, 349(9066), 1655–1659.
Madden, G. J., Begotka, A. M., Raiff, B. R., & Kastern, L. L. (2003). Delay discounting of real and hypothetical rewards. Experimental and Clinical Psychopharmacology, 11(2), 139–145.
Manzini, P., Mariotti, M., & Mittone, L. (2010). Choosing monetary sequences: Theory and experimental evidence. Theory and Decision, 69(3), 327–354.
Mazur, J. E. (1987). An adjusting procedure for studying delayed reinforcement. In M. L. Commons, J. E. Mazur, J. A. Nevins, & H. Rachlin (Eds.), Quantitative analysis of behavior: The effect of delay and of intervening events on reinforcement value. Hillsdale, NJ: Ballinger.
Meier, S., & Sprenger, C. (2010). Present-biased preferences and credit card borrowing. American Economic Journal: Applied Economics, 2, 193–210.
Meier, S., & Sprenger, C. D. (2013). Discounting financial literacy: Time preferences and participation in financial education programs. Journal of Economic Behavior & Organization, 95, 159–174.
Moore, M. J., & Viscusi, W. K. (1990). Discounting environmental health risks: New evidence and policy implications. Journal of Environmental Economics and Management, 18(2), S51–S62.
Paserman, M. D. (2008). Job search and hyperbolic discounting: Structural estimation and policy evaluation. Economic Journal, 118(531), 1418–1452.
Phelps, E. S., & Pollak, R. A. (1968). On second-best national savings and game-equilibrium growth. Review of Economic Studies, 35(2), 185–199.
Prelec, D., & Rohde, K. I. M. (2016). Dual exponential weighting – Impatience and patience within a single decision maker. Working Paper, MIT & Erasmus University.
Read, D., & Read, N. L. (2004). Time discounting over the lifespan. Organizational Behavior and Human Decision Processes, 94(1), 22–32.
Read, D., & Roelofsma, P. H. (2003). Subadditive versus hyperbolic discounting: A comparison of choice and matching. Organizational Behavior and Human Decision Processes, 91(2), 140–153.
Read, D., Frederick, S., Orsel, B., & Rahman, J. (2005). Four score and seven years from now: The date/delay effect in temporal discounting. Management Science, 51(9), 1326–1335.
Redelmeier, D. A., & Heller, D. N. (1993). Time preference in medical decision making and cost-effectiveness analysis. Medical Decision Making: An International Journal of the Society for Medical Decision Making, 13(3), 212–217.
Reynolds, B., Ortengren, A., Richards, J. B., & de Wit, H. (2006). Dimensions of impulsive behavior: Personality and behavioral measures. Personality and Individual Differences, 40(2), 305–315.
Scharff, R. L., & Viscusi, W. K. (2011). Heterogeneous rates of time preference and the decision to smoke. Economic Inquiry, 49(4), 959–972.
Sozou, P. D., & Seymour, R. M. (2003). Augmented discounting: Interaction between ageing and time-preference behaviour. Proceedings of the Royal Society B: Biological Sciences, 270(1519), 1047–1053.
Tanaka, T., Camerer, C. F., & Nguyen, Q. (2010). Risk and time preferences: Linking experimental and household survey data from Vietnam. American Economic Review, 100(1), 557–571.
Ubfal, D. (2016). How general are time preferences? Eliciting good-specific discount rates. Journal of Development Economics, 118, 150–170.
van der Pol, M. M., & Cairns, J. A. (2000). Negative and zero time preference for health. Health Economics, 9, 171–175.
van der Pol, M. M., & Cairns, J. (2002). A comparison of the discounted utility model and hyperbolic discounting models in the case of social and private intertemporal preferences for health. Journal of Economic Behavior and Organization, 49, 79–96.
van der Pol, M. M., & Cairns, J. (2011). Descriptive validity of alternative intertemporal models for health outcomes: An axiomatic test. Health Economics, 20(7), 770–782.
van der Pol, M. M., Walsh, D., & McCartney, G. (2015). Comparing time and risk preferences across three post-industrial UK cities. Social Science & Medicine, 140, 54–61.
Van Hout, B. A. (1998). Discounting costs and effects: A reconsideration. Health Economics, 7(7), 581–594.
Viscusi, W. K., & Aldy, J. E. (2003). The value of a statistical life: A critical review of market estimates throughout the world. Journal of Risk and Uncertainty, 27(1), 5–76.
Wakker, P. P., & Deneffe, D. (1996). Eliciting von Neumann-Morgenstern utilities when probabilities are distorted or unknown. Management Science, 42(8), 1131–1150.
Warner, J. T., & Pleeter, S. (2001). The personal discount rate: Evidence from military downsizing programs. American Economic Review, 91(1), 33–53.
Wathieu, L. (1997). Habits and the anomalies in intertemporal choice. Management Science, 43(11), 1552–1563.
