A comparison of the discounted utility model and hyperbolic discounting models in the case of social and private intertemporal preferences for health


van der Pol, 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 & organization, 49 (1). pp. 79-96. ISSN 0167-2681 DOI: https://doi.org/10.1016/S0167-2681(02)00059-8

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Abstract

Whilst there is substantial evidence that hyperbolic discounting models describe intertemporal preferences for monetary outcomes better than the discounted utility (DU) model, there is only very limited evidence in the context of health outcomes. This study elicits private and social intertemporal preferences for non-fatal changes in health. Specific functional forms of the DU model and three hyperbolic models are fitted, The results show that the stationarity axiom is violated, and that the hyperbolic models fit the data better than the DU model. Intertemporal preferences for private and social decisions are found to be very similar. (C) 2002 Published by Elsevier Science B.V.

Item Type: Article
Keywords: stationarity, hyperbolic discounting, health, decreasing timing aversion, time preference, delayed rewards, saving lives, choice, decisions, reversals, anomalies
Faculty and Department: Faculty of Public Health and Policy > Dept of Health Services Research and Policy
Web of Science ID: 177015500005
URI: http://researchonline.lshtm.ac.uk/id/eprint/14509

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