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

Marjon Pol van der, John Alexander Cairns

Research output: Contribution to journalArticle

30 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)79-96
Number of pages17
JournalJournal of Economic Behavior and Organization
Volume49
Issue number1
DOIs
Publication statusPublished - Sep 2002

Keywords

  • stationarity
  • hyperbolic discounting
  • health
  • DECREASING TIMING AVERSION
  • TIME PREFERENCE
  • DELAYED REWARDS
  • SAVING LIVES
  • CHOICE
  • DECISIONS
  • REVERSALS
  • ANOMALIES

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