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. 2018;56(2):117-140.
doi: 10.1007/s11166-018-9279-1. Epub 2018 May 9.

Discounting health and money: New evidence using a more robust method

Arthur E Attema  1 , Han Bleichrodt  2   3 , Olivier L'Haridon  4 , Patrick Peretti-Watel  5 , Valérie Seror  5
Affiliations

Discounting health and money: New evidence using a more robust method

Arthur E Attema et al. J Risk Uncertain. 2018.

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 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.

Keywords: Constant discounting; Direct method; Field study; Health versus money; Hyperbolic discounting; Time preference.

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Figures

Fig. 1
Fig. 1
Example of a choice question
Fig. 2
Fig. 2
Median and mean cumulative weighting functions for health and money
Fig. 3
Fig. 3
Relation between the area measures for health and money
Fig. 4
Fig. 4
Cumulative distribution functions of the discount rates for health and money
See this image and copyright information in PMC

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