Constant and decreasing timing aversion for saving lives

Evidence accumulation is not essential for generating intertemporal preference: A comparison of dynamic cognitive models of matching tasks

Intertemporal preference has been investigated mainly with a choice paradigm. However, a matching paradigm might be more informative for a proper inference about intertemporal preference and a deep understanding of the underlying cognitive mechanisms. This research involved two empirical studies using the matching paradigm and compared various corresponding dynamic models. These models were developed under either the framework of decision field theory, an exemplar theory assuming evidence accumulation, or a non-evidence-accumulation framework built upon the well-established notions of random utility and discrimination threshold (i.e., the RUDT framework). Most of these models were alternative-based whereas the others were attribute-based ones. Participants in Study 1 were required to fill in the amount of an immediate stimulus to make it as attractive as a delayed stimulus, whereas those in Study 2 needed to accomplish a more general matching task in which either the payoff amount or delay length of one stimulus was missing. Consistent behavioral regularities regarding both matching values and response times were revealed in these studies. The results of model comparison favored in general the RUDT framework as well as an attribute-based perspective on intertemporal preference. In addition, the predicted matching values and response times of the best RUDT model were also highly correlated with the observed data and replicated most observed behavioral regularities. Together, this research and previous modeling work on intertemporal choice suggest that evidence accumulation is not essential for generating intertemporal preference. Future research should examine the validity of the new framework in other preferential decisions for a more stringent test of the framework.

Good things come to those who wait-Decreasing impatience for health gains and losses

Historically, time preferences are modelled by assuming constant discounting, which implies a constant level of impatience. The prevailing empirical finding, however, is decreasing impatience (DI), meaning that levels of impatience decrease over time. Theoretically, such changes in impatience are crucial to understand behavior and self-control problems. Very few methods exist to measure DI without being restricted to or confounded by certain assumptions about the discounting function or utility curve. One such measure is the recently introduced DI-index, which has been applied to both monetary and health outcomes. The DI-index quantifies the deviation from constant impatience and is flexible enough to capture both increasing and decreasing impatience. In this study, we apply the DI-index to measure impatience for health outcomes in a reference-dependent framework. That is, we measure impatience for both health gains and health losses compared to a reference-point, in individual and societal settings, using a within-subjects design (n = 98). We allowed for both positive and negative discounting, since negative discounting has been observed for losses (i.e. preferring to incur losses earlier rather than later) in earlier work. To capture changes in time inconsistency when subjects show negative discounting (i.e. patience), we modify the DI-index to a decreasing (im)patience (DIP)-index, which can be applied without loss of generality. As in earlier work, we observe large heterogeneity in time consistency; i.e., a mix of decreasing, increasing and constant (im)patience. Across all DIP-indices elicited, increasing impatience was the modal preference for those satisfying impatience, and decreasing patience for those satisfying patience. No systematic differences were observed between health gains and losses or between societal and individual outcomes. This suggests that for health outcomes both patient and impatient individuals assign more importance to time differences delayed further in the future.

Private and social time preference for health outcomes: A general population survey in Iran

Despite the recent increase in economic evaluations of health care programs in low and middle income countries, there is still a surprising gap in evidence on the appropriate discount rate and the discounting of health outcomes such as quality adjusted life years (QALYs). Our study aimed to calculate the implied time preference rate for health outcomes in Iran and its key determinants. Data were gathered from one family member from each of the 650 households randomly selected in Tehran. The respondents’ private and social preferences for health outcomes were calculated using the time trade-off (TTO) technique based on the discounted utility model. We investigated the main assumptions of the discounted utility model through equality of mean comparison, and the association between private time preference and key socio-economic determinants using multilevel regression analysis. The mean and median implied rates were 5.8% and 4.9% for private time preference and 25.6% and 20% for social time preference respectively. Our study confirmed that magnitude, framing and time effects have a significant impact on implied discount rates, which means that the conventional discounted utility model’s main assumptions are violated in the Iranian general population. Other models of discounting which apply lower rates for far health outcomes might provide a more sensible solution to discounting health interventions with long-term impacts.

Doctor-patient differences in risk and time preferences: A field experiment

We conduct a framed field experiment among patients and doctors to test whether the two groups have similar risk and time preferences. We elicit risk and time preferences using multiple price list tests and their adaptations to the healthcare context. Risk and time preferences are compared in terms of switching points in the tests and the structurally estimated behavioural parameters. We find that doctors and patients significantly differ in their time preferences: doctors discount future outcomes less heavily than patients. We find no evidence that doctors and patients systematically differ in their risk preferences in the healthcare domain.

Four days later in Cincinnati: longitudinal tests of hyperbolic discounting

Hyperbolic discounting of delayed rewards has been proposed as an underlying cause of the failure to stick to plans to forego one's immediate desires, such as the plan to diet, wake up early, or quit taking heroin. We conducted two tests of inconsistent planning in which respondents made at least two choices between a smaller-sooner (SS) and larger-later (LL) amount of money, one several weeks before SS would be received, and one immediately before. Hyperbolic discounting predicts that there would be more choices of SS as it became more proximate-and, equivalently, that among those who change their mind, "impatient shifts" (LL-to-SS) will be more common than "patient shifts" (SS-to-LL). We find no evidence for this, however, and in our studies shifts in both directions were equally likely. We propose that some of the evidence cited on behalf of hyperbolic discounting can be attributed to qualitatively different psychological mechanisms.

On discounting of health gains from human papillomavirus vaccination: effects of different approaches

OBJECTIVES

Discounting has long been a matter of controversy in the field of health economic evaluations. How to weigh future health effects has resulted in ongoing discussions. These discussions are imminently relevant for health care interventions with current costs but future benefits. Different approaches to discount health effects have been proposed. In this study, we estimated the impact of different approaches for discounting health benefits of human papillomavirus (HPV) vaccination.

METHODS

An HPV model was used to estimate the impact of different discounting approaches on the present value of health effects. For the constant discount approaches, we varied the discount rate for health effects ranging from 0% to 4%. Next, the impact of relevant alternative discounting approaches was estimated, including hyperbolic, proportional, stepwise, and time-shifted discounting.

RESULTS

The present value of health effects gained through HPV vaccination varied strongly when varying discount rates and approaches. The application of the current Dutch guidelines resulted in a present value of health effects that was eight or two times higher than that produced when using the proportional discounting approach or when using the internationally more common 4% discount rate for health effects, respectively. Obviously, such differences translate into large variations in corresponding incremental cost-effectiveness ratios.

CONCLUSION

The exact discount rate and approach chosen in an economic evaluation importantly impact the projected value of health benefits of HPV vaccination. Investigating alternative discounting approaches in health-economic analysis is important, especially for vaccination programs yielding health effects far into the future. Our study underlines the relevance of ongoing discussions on how and at what rates to discount.

Policies to clean up toxic industrial contaminated sites of Gela and Priolo: a cost-benefit analysis

BACKGROUND

Cost-benefit analysis is a transparent tool to inform policy makers about the potential effect of regulatory interventions, nevertheless its use to evaluate clean-up interventions in polluted industrial sites is limited. The two industrial areas of Gela and Priolo in Italy were declared "at high risk of environmental crisis" in 1990. Since then little has been done to clean the polluted sites and reduce the health outcomes attributable to pollution exposure. This study, aims to quantify the monetary benefits resulting from clean-up interventions in the contaminated sites of Gela and Priolo.

METHODS

A damage function approach was used to estimate the number of health outcomes attributable to industrial pollution exposure. Extensive one way analyses and probabilistic analyses were conducted to investigate the sensitivity of results to different model assumptions.

RESULTS

It has been estimated that, on average, 47 cases of premature death, 281 cases of cancer and 2,702 cases of non-cancer hospital admission could be avoided each year by removing environmental exposure in these two areas. Assuming a 20 year cessation lag and a 4% discount rate we calculate that the potential monetary benefit of removing industrial pollution is €3,592 million in Priolo and €6,639 million in Gela.

CONCLUSIONS

Given the annual number of health outcomes attributable to pollution exposure the effective clean-up of Gela and Priolo should be prioritised. This study suggests that clean-up policies costing up to €6,639 million in Gela and €3,592 million in Priolo would be cost beneficial. These two amounts are notably higher than the funds allocated thus far to clean up the two sites, €127.4 million in Gela and €774.5 million in Priolo, implying that further economic investments - even considerable ones - could still prove cost beneficial.

Social time preferences for health and money elicited with a choice experiment

OBJECTIVES

In economic evaluations future health and monetary outcomes are commonly discounted at equal and constant rates. The theoretical foundation of this practice is being debated and appropriate discount rates for costs and health effects are sought. Here, we have derived social discount rates for health, money, and environmental benefits by means of a choice experiment.

METHODS

All choices were framed from a social perspective. We investigated differences in time preference by domain (health, monetary benefits, environmental benefits), time delay (5, 10, and 40 years), and respondent characteristics. Respondents were 173 health-care professionals and 34 health policymakers. Choice titration was used to determine when the respondent was indifferent between future and present benefits.

RESULTS

At least two-thirds of respondents preferred an intervention with immediate benefits to delayed benefits in the different domains. The median (mean) yearly discount rates for health benefits were 2.7% (10.7%), 1.3% (3.5%), and 1.1% (2.3%) assuming a 5, 10, and 40 years delay, respectively. Social time preference for monetary benefits was significantly stronger, with median (mean) yearly discount rates of 6.6% (18.7%) and 4.8% (11.2%) assuming a 5 and 10 years delay, respectively. The social time preference with regard to environmental benefits was similar to the monetary benefits. Social time preference for the different domains was significantly correlated at the individual level.

CONCLUSIONS

The empirically derived social time preference is in line with current theoretical arguments for a lower discount rate for health benefits than for monetary benefits. Moreover, the implied median discount rates for health were lower than those commonly used or advocated in guidelines.

Comparison of two methods of eliciting time preference for future health states

Mean estimates of time preference rates for health vary widely in the literature. If these studies are to inform discounting practice and analyses of health-affecting behaviour, it is crucial to understand why this is the case. One reason for the variation in time preference rates is the use of different elicitation methods. The influence of elicitation method has received little attention in the time preference literature. This study compares directly an open-ended and a closed-ended method. Both private and social time preferences for health are elicited. The closed-ended method produced much lower mean rates than the open-ended method. This is in contrast to the contingent valuation literature which shows that closed-ended methods produce higher estimates of willingness to pay than open-ended methods. That the elicitation methods produce different mean estimates is clearly worrying if the interest is in estimating the true time preference rate. However, the results of this study suggest that if the interest is in testing different types of time preferences or investigating the relationship between time preference and individual characteristics then the choice of elicitation method is less important.

Exploring differences in empirical time preference rates for health: an application of meta-regression

Estimated time preference rates are extremely varied, with many rates being extremely high. Reviewing empirical studies without quantitative synthesis of their findings is largely unhelpful in determining how rates vary according to different factors. This study therefore explores the use of meta-regression techniques to combine available evidence to draw reliable conclusions about the factors influencing empirical time preference rates. Papers reporting empirically derived time preference rates related to health and health-care programmes were selected. Included were papers presenting all of: a mean time preference rate; information allowing derivation of standard errors; and one or more covariates. Appropriate data were derived from only eight of the 16 papers reporting empirical time preference rates. Meta-regression indicated that there were statistically significant relationships between mean time preference rates and: (a) delay period on a log scale; (b) whether the outcome question related to a gain or a loss. There were a number of limitations related to the use of meta-regression in this area, including difficulties in extracting appropriate data from the original studies, and the extent to which the original studies provide fully deliberated estimates of time preference.

The economics of primary prevention of cardiovascular disease - a systematic review of economic evaluations

BACKGROUND

In the quest for public and private resources, prevention continues to face a difficult challenge in obtaining tangible public and political support. This may be partly because the economic evidence in favour of prevention is often said to be largely missing. The overall aim of this paper is to examine whether economic evidence in favour of prevention does exist, and if so, what its main characteristics, weaknesses and strengths are. We concentrate on the evidence regarding primary prevention that targets cardiovascular disease event or risk reduction.

METHODS

We conducted a systematic literature review of journal articles published during the period 1995-2005, based on a comprehensive key-word based search in generic and specialized electronic databases, accompanied by manual searches of expert databases. The search strategy consisted of combinations of freetext and keywords related to economic evaluation, cardiovascular diseases, and primary preventive interventions of risk assessment or modification.

RESULTS

A total of 195 studies fulfilled all of the relevant inclusion criteria. Overall, a significant amount of relevant economic evidence in favour of prevention does exist, despite important remaining gaps. The majority of studies were cost-effectiveness-analyses, expressing benefits as "life years gained", were conducted in a US or UK setting, assessed clinical prevention, mainly drugs targeted at lowering lipid levels, and referred to subjects aged 35-64 years old with at least one risk factor.

CONCLUSION

First, this review has demonstrated the obvious lack of economic evaluations of broader health promotion interventions, when compared to clinical prevention. Second, the clear role for government to engage more actively in the economic evaluation of prevention has become very obvious, namely, to fill the gap left by private industry in terms of the evaluation of broader public health interventions and regarding clinical prevention, in light of the documented relationship between study funding and reporting of favourable results. Third, the value of greater adherence to established guidelines on economic evaluation cannot be emphasised enough. Finally, there appear to be certain methodological features in the practice of economic evaluations that might bias the choice between prevention and cure in favour of the latter.

Time preferences for health in northern Tanzania: an empirical analysis of alternative discounting models

AIM

The discounted utility (DU) model has dominated economic evaluation for almost 7 decades, despite the fact that important assumptions of the model are commonly found to be violated. This paper formally explores whether the key assumption of stationarity is violated in a sample of the general population of Northern Tanzania. Furthermore, three hyperbolic discounting models are fitted to the data, and whether they perform better than the DU model in predicting individuals' time preferences is tested using nonlinear least squares regression.

METHOD

The data were collected from 450 households by trained enumerators. The individual data on time preferences were collected by structured interviews using an open-ended stated preference methodology. Respondents marked a rating scale to indicate the maximum number of days they would be willing to suffer a nonfatal disease if the outbreak of the disease could be delayed to a point further into the future. Households were randomised to answer questions framed to elicit either a private or social time preference.

RESULTS

Hypothesis testing confirmed decreasing time aversion and a magnitude effect, suggesting that the DU model is inappropriate as a descriptive tool. When the DU model was compared with the three hyperbolic discounting models by analysing the discount factor using nonlinear least squares regression, the most important findings were that a variable for starting point was nonsignificant only for the Loewenstein and Prelec (L&P) and the Mazur models, and that people in this setting generally discounted future health far more than suggested by current discounting practice in economic evaluations.

CONCLUSION

The time preferences of our sample are better represented by the L&P and the Mazur models (which allow relaxation of the stationarity assumption through a modification of the expression for the discount factor) and less well reflected by the Harvey (a modification of the L&P model that assigns more importance to the future than standard utility discounting) and DU models. This implies that, from the point of view of a consumer sovereignty-friendly economist, the Mazur and the L&P models are preferable for discounting of future health in economic evaluations. However, from the point of view of other value bases for discounting the choice of discounting model is of less importance.

Estimation of private and social time preferences for health in northern Tanzania

Time preferences for health has a role in informing discounting practice in economic evaluation of health care interventions. Yet virtually no empirical evidence on time preferences for health are available for sub-Saharan Africa. The objectives of this paper are therefore to estimate time preferences for health in Tanzania, and to explore the relationship between time preferences for one's own private health and for others health. Determinants of time preference rates are also explored. A sample of the general population participated, and each person was asked to indicate the maximum duration of more distant ill-health they would be willing to accept in return for a specified delay in the onset of the condition. People were randomised to answer either questions in the context of their own health or in the context of others health. Estimations were done using clustered least squares regression with robust standard errors. The implied mean and median discount rates were 0.07 and 0.058, respectively. Time preferences for one's own and others' health--conceptualised as social health--seem to be roughly the same in this sample, but people seem to discount the most severe health condition at a significantly lower rate than the least severe condition.

Societal discounting of health effects in cost-effectiveness analyses: the influence of life expectancy

BACKGROUND

Increasing life expectancy and decreasing marginal valuation of additional QALYs over time may serve as a basis for discounting future health effects from a societal perspective. Therefore, we tested the hypothesis that societal time preference for health is related to perceived future life expectancy.

METHODS

A sample of 223 people from the general population prioritised healthcare programmes with differential timing of health benefits and costs from a societal perspective. Furthermore, we asked respondents to estimate future life expectancy.

RESULTS

The relationship between future life expectancy and time preference for health is ambiguous. We observed that people who expected a higher future life expectancy elicited higher discount rates for health effects than those with lower life expectancy growth expectations for all four time periods (5, 10, 20 and 40 years into the future), but the differences were never significant. On average, providing explicit information on growth in life expectancy did significantly alter discount rates in the expected direction but, on an individual level, the results were rather inconsistent. We observed a significantly stronger time preference (i.e. higher discount rates) for health effects than for costs. As commonly observed, discount rates for health and money decreased with time delay following a hyperbolic function.

CONCLUSION

Our data indicate that it is troublesome to elicit societal discount rates empirically, especially rates that are in line with the theoretical arguments on societal discounting. The influence of life expectancy remains ambiguous, but there seems to be at least some positive relationship between growth in life expectancy and discount rates that deserves additional attention.

Discounting and clinical decision making: physicians, patients, the general public, and the management of asymptomatic abdominal aortic aneurysms

Clinical decisions often entail in intertemporal trade-off. Moreover, they often involve physicians of different specialities. In an experiment dealing with the management of small asymptomatic abdominal aortic aneurysms (a clinically relevant problem) we find that specialists in internal medicine exhibit higher implicit discount rates than vascular surgeons, general practitioners, and actual and prospective patients. Several personal characteristics expected to be directly related to pure time-preference and risk aversion (gender, smoking habits, age, place of employment) have the hypothesised effects. Additionally, financial incentives appear to affect the estimated implicit discount rates of physicians, but are unlikely to have caused the inter-group differences. Differences in discount rates could lead to variations in clinical practice, which may conflict with equality of treatment or equal access to health care.

Do people value their own future health differently from others' future health?

The purpose of this study was to investigate whether time preferences for own health are the same as time preferences for others' health. A random sample of the general public was sent a postal questionnaire containing six choices between ill health in the near future and ill health in the further future. They were asked to indicate the maximum duration of more distant ill health they would be willing to accept in return for a specified delay in the onset of the period of ill health. For half of the sample the questions were set in the context of their own health and for the other half in terms of others' health. The median implied discount rates were not statistically different, 0.061 for own health and 0.062 for others' health. A multilevel analysis of the determinants of these implied discount rates provided additional evidence of the similarity of time preferences for own health and others' health.