A measurement of decreasing impatience for health and money

• Published in: Journal of risk and uncertainty Vol. 52; no. 3; pp. 213 - 231
• Main Authors: Bleichrodt, Han, Gao, Yu, Rohde, Kirsten I. M.
• Format: Journal Article
• Language: English
• Published: New York Springer 01.06.2016; Springer US; Springer Nature B.V
• Subjects: Back pain; Consumer attitudes; Consumer preferences; Convexity; Discount rates; Discounting; Economic models; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Empirical evidence; Environmental Economics; Experiments; Financial risk; Health care economics; Health care industry; Health outcomes; Management science; Microeconomics; Money; Operations Research/Decision Theory; Personal health; Preferences; Risk; Self control; Studies; Uncertainty; United States; United States > US; I10; Decreasing impatience; Hyperbolic discounting; Health; D91; Time preference
• ISSN: 0895-5646; 1573-0476
• DOI: 10.1007/s11166-016-9240-0

This paper measures deviations from constant discounting and compares these deviations for health and money. Our measurements make no assumptions about utility and do not require separability of preferences over time. In an experiment, most subjects were decreasingly impatient, but a substantial minority was increasingly impatient. The deviations from constant discounting were more pronounced for health than for money suggesting that time preferences are domain-specific. Hyperbolic discounting (Loewenstein and Prelec, Quarterly Journal of Economics, 107, 573—597, 1992) and proportional discounting (Mazur, Quantitative Analyses of Behavior, 5, 55—73, 1987) best described time preferences. Quasi-hyperbolic discounting, the most popular model to accommodate deviations from constant discounting, was rejected for both health and money.