Discounting Health and Money: New Evidence Using A More Robust Method

Arthur Attema, Han Bleichrodt, Olivier L’haridon (), Patrick Peretti-Watel () and Valerie Seror ()
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Olivier L’haridon: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Patrick Peretti-Watel: SESSTIM - U1252 INSERM - Aix Marseille Univ - UMR 259 IRD - Sciences Economiques et Sociales de la Santé & Traitement de l'Information Médicale - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université - INSERM - Institut National de la Santé et de la Recherche Médicale
Authors registered in the RePEc Author Service: Olivier L'Haridon

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Abstract: 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 the direct method solves the puzzle of unrealistically high discount rates typically observed in applied economics. Constant discounting fitted the data better than hyperbolic discounting. The substantial individual heterogeneity in discounting could be explained by age and occupation.

Keywords: Hyperbolic discounting; Constant discounting; Health versus money; Time preference; Direct method; Field study (search for similar items in EconPapers)
Date: 2018-05-09
New Economics Papers: this item is included in nep-hea and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01683771v1
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Citations: View citations in EconPapers (23)

Published in Journal of Risk and Uncertainty, 2018, 56 (2), pp.117-140. ⟨10.1007/s11166-018-9279-1⟩

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Journal Article: Discounting health and money: New evidence using a more robust method (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01683771

DOI: 10.1007/s11166-018-9279-1

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