IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/5659.html
   My bibliography  Save this paper

Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies

Author

Listed:
  • Neuman, Shoshana
  • Neuman, Einat

Abstract

The standard assumption in economic theory is that preferences are stable. In particular, they are not changed as a result of experience with the good/service/event. Behavioral scientists have challenged this assumption and claimed (providing evidence) that preferences are constantly changing when experience is accumulated. This paper tests the effect of experience on preferences for attributes of health-care events. We are using two very different samples and a methodology that facilitates the estimation of marginal utilities of various attributes of a composite non-traded health-care service. Discrete Choice Experimental design is employed for the analysis of samples of (1) women who gave birth, and (2) women who were diagnosed with breast cancer. For each group we had information on experience. In the case of women who gave birth, the sample was decomposed into 3 sub-samples: pregnant women with their first child (no experience); women after one delivery (single experience); and mothers after more than one delivery (multiple experience). Preferences of the 3 sub-groups have then been compared. The breast cancer patients reported the number of chemotherapy/radiation treatments they have already received, thus enabling the construction of an experience variable and testing for the effect of experience on preferences. The basic finding is that preferences for health-care attributes are significantly changed as a result of experience with the health event. However, the amount of experience is irrelevant.

Suggested Citation

  • Neuman, Shoshana & Neuman, Einat, 2006. "Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies," CEPR Discussion Papers 5659, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5659
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP5659
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. Victor R. Fuchs, 2018. "The Supply of Surgeons and the Demand for Operations," World Scientific Book Chapters, in: Health Economics and Policy Selected Writings by Victor Fuchs, chapter 16, pages 171-192, World Scientific Publishing Co. Pte. Ltd..
    3. San Miguel, Fernando & Ryan, Mandy & Scott, Anthony, 2002. "Are preferences stable? The case of health care," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 1-14, May.
    4. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    5. G. Salkeld & M. Ryan & L. Short, 2000. "The veil of experience: do consumers prefer what they know best?," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 267-270, April.
    6. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    7. Constantinides, George M, 1990. "Habit Formation: A Resolution of the Equity Premium Puzzle," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 519-543, June.
    8. Pollak, Robert A., 1976. "Habit formation and long-run utility functions," Journal of Economic Theory, Elsevier, vol. 13(2), pages 272-297, October.
    9. Michael Grossman, 1976. "The Correlation between Health and Schooling," NBER Chapters, in: Household Production and Consumption, pages 147-224, National Bureau of Economic Research, Inc.
    10. Goldman, Fred & Grossman, Michael, 1978. "The Demand for Pediatric Care: An Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 259-280, April.
    11. Jay J.J. Christensen-Szalanski, 1984. "Discount Functions and the Measurement of Patients' Values," Medical Decision Making, , vol. 4(1), pages 47-58, February.
    12. Mandy Ryan & Cristina Ubach, 2003. "Testing for an experience endowment effect in health care," Applied Economics Letters, Taylor & Francis Journals, vol. 10(7), pages 407-410.
    13. Grossman, Michael, 1982. "Government and Health Outcomes," American Economic Review, American Economic Association, vol. 72(2), pages 191-195, May.
    14. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alessandro Mengoni & Chiara Seghieri & Sabina Nuti, 2013. "The application of discrete choice experiments in health economics: a systematic review of the literature," Working Papers 201301, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Neuman, Tzahi & Neuman, Einat & Neuman, Shoshana, 2010. "Explorations of the effect of experience on preferences for a health-care service," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(3), pages 407-419, June.
    2. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    3. Gjerde, Jon & Grepperud, Sverre & Kverndokk, Snorre, 2009. "On adaptation, life-extension possibilities and the demand for health," HERO Online Working Paper Series 2001:7, University of Oslo, Health Economics Research Programme.
    4. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    5. Floris Heukelom, 2007. "Who are the Behavioral Economists and what do they say?," Tinbergen Institute Discussion Papers 07-020/1, Tinbergen Institute.
    6. Richard G. Frank, 2004. "Behavioral Economics and Health Economics," NBER Working Papers 10881, National Bureau of Economic Research, Inc.
    7. Michael Grossman, 2006. "Household Production and Health," Springer Books, in: Shoshana Grossbard (ed.), Jacob Mincer A Pioneer of Modern Labor Economics, chapter 13, pages 161-172, Springer.
    8. Tirole, Jean, 2002. "Rational irrationality: Some economics of self-management," European Economic Review, Elsevier, vol. 46(4-5), pages 633-655, May.
    9. Floris Heukelom, 2007. "Kahneman and Tversky and the Origin of Behavioral Economics," Tinbergen Institute Discussion Papers 07-003/1, Tinbergen Institute.
    10. Christian Grund & Dirk Sliwka, 2007. "Reference-Dependent Preferences and the Impact of Wage Increases on Job Satisfaction: Theory and Evidence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 313-335, June.
    11. Elie Matta & Jean McGuire, 2008. "Too Risky to Hold? The Effect of Downside Risk, Accumulated Equity Wealth, and Firm Performance on CEO Equity Reduction," Organization Science, INFORMS, vol. 19(4), pages 567-580, August.
    12. Joshua M. Epstein, 2007. "Agent-Based Computational Models and Generative Social Science," Introductory Chapters, in: Generative Social Science Studies in Agent-Based Computational Modeling, Princeton University Press.
    13. Schilirò, Daniele & Graziano, Mario, 2011. "Scelte e razionalità nei modelli economici: un'analisi multidisciplinare [Choices and rationality in economic models: a multidisciplinary analysis]," MPRA Paper 31910, University Library of Munich, Germany.
    14. David J. Mott & Laura Ternent & Luke Vale, 2023. "Do preferences differ based on respondent experience of a health issue and its treatment? A case study using a public health intervention," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(3), pages 413-423, April.
    15. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    16. Christopher Boyce & Mikolaj Czajkowski & Nick Hanley & Charles Noussair & Michael Townsend & Steve Tucker, 2015. "The effects of emotions on preferences and choices for public goods," Discussion Papers in Environment and Development Economics 2015-08, University of St. Andrews, School of Geography and Sustainable Development.
    17. Chen Zhen & Michael K. Wohlgenant, 2006. "Meat Demand under Rational Habit Persistence," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(4), pages 477-495, December.
    18. Manel Baucells & Silvia Bellezza, 2017. "Temporal Profiles of Instant Utility During Anticipation, Event, and Recall," Management Science, INFORMS, vol. 63(3), pages 729-748, March.
    19. Lelkes, Orsolya, 2006. "Tasting freedom: Happiness, religion and economic transition," Journal of Economic Behavior & Organization, Elsevier, vol. 59(2), pages 173-194, February.
    20. Gerdtham, Ulf-G & Johannesson, Magnus, 2001. "The relationship between happiness, health, and socio-economic factors: results based on Swedish microdata," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 30(6), pages 553-557.

    More about this item

    Keywords

    Preferences; Experience; Discrete choice experiment; Health-care; Delivery; Breast cancer;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I19 - Health, Education, and Welfare - - Health - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5659. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.