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Your Money or Your Health: Time Preferences and Trading Money for Health

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  • Gretchen B. Chapman

    (Department of Psychology, Rutgers University, Piscataway, New Jersey)

Abstract

Background . Time preferences reflect how future outcomes are valued relative to present ones. Previous research has found that time preferences for one domain (say, money) are inconsistent (uncorrelated) with those from another (say, health). The present studies evaluated whether this domain independence was due to decision makers’ sensitivity to a normatively appropriate principle about the tradability of health and money. Method . Participants read a scenario in which health and money were described as tradable or not tradable and then responded to hypothetical intertemporal trade-off questions. Results . In experiment 1, participants showed higher agreement between health and money time preferences in the tradable condition, as predicted. In experiment 2, participants responded from either an individual decision maker or policy maker perspective. Perspective had little effect on agreement between health and money discount rates, but there was again higher agreement in the tradable as compared to the not-tradable condition. Conclusion . Previous demonstrations of domain independence may have been due in part to decision makers’ assumption that health and money are not tradable.

Suggested Citation

  • Gretchen B. Chapman, 2002. "Your Money or Your Health: Time Preferences and Trading Money for Health," Medical Decision Making, , vol. 22(5), pages 410-416, October.
    • Handle: RePEc:sae:medema:v:22:y:2002:i:5:p:410-416
    DOI: 10.1177/027298902236929
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    References listed on IDEAS

    as
    1. John Cairns, 1992. "Discounting and health benefits: Another Perspective," Health Economics, John Wiley & Sons, Ltd., vol. 1(1), pages 76-79, April.
    2. Uri Benzion & Amnon Rapoport & Joseph Yagil, 1989. "Discount Rates Inferred from Decisions: An Experimental Study," Management Science, INFORMS, vol. 35(3), pages 270-284, March.
    3. Ben A. Van Hout, 1998. "Discounting costs and effects: a reconsideration," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 581-594, November.
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    Cited by:

    1. Liam Delaney & Caroline Rawdon & Kevin Denny & Wen Zhang & Richard A.P. Roche, 2008. "Event-Related Potentials Reveal Differential Brain Regions Implicated in Discounting in Two Tasks," Working Papers 200811, Geary Institute, University College Dublin.
    2. Ubfal, Diego, 2016. "How general are time preferences? Eliciting good-specific discount rates," Journal of Development Economics, Elsevier, vol. 118(C), pages 150-170.
    3. Harrell Chesson & Jami Leichliter & Gregory Zimet & Susan Rosenthal & David Bernstein & Kenneth Fife, 2006. "Discount rates and risky sexual behaviors among teenagers and young adults," Journal of Risk and Uncertainty, Springer, vol. 32(3), pages 217-230, May.
    4. repec:cup:judgdm:v:8:y:2013:i:1:p:74-90 is not listed on IDEAS
    5. Frank Sloan & Lindsey Eldred, 2015. "Do preferences of drinker-drivers differ?," International Journal of Health Economics and Management, Springer, vol. 15(2), pages 241-268, June.
    6. Duffy, Sean & Smith, John, 2013. "Preference for increasing wages: How do people value various streams of income?," Judgment and Decision Making, Cambridge University Press, vol. 8(1), pages 74-90, January.
    7. Denise Bijlenga & Gouke J. Bonsel & Erwin Birnie, 2011. "Eliciting willingness to pay in obstetrics: comparing a direct and an indirect valuation method for complex health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 20(11), pages 1392-1406, November.

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