Time preference and its relationship with age, health, and survival probability

Journal Title: Judgment and Decision Making - Year 2009, Vol 4, Issue 1

Abstract

Although theories from economics and evolutionary biology predict that one’s age, health, and survival probability should be associated with one’s subjective discount rate (SDR), few studies have empirically tested for these links. Our study analyzes in detail how the SDR is related to age, health, and survival probability, by surveying a sample of individuals in townships around Durban, South Africa. In contrast to previous studies, we find that age is not significantly related to the SDR, but both physical health and survival expectations have a U-shaped relationship with the SDR. Individuals in very poor health have high discount rates, and those in very good health also have high discount rates. Similarly, those with expected survival probability on the extremes have high discount rates. Therefore, health and survival probability, and not age, seem to be predictors of one’s SDR in an area of the world with high morbidity and mortality.

Authors and Affiliations

Li-Wei Chao, Helena Szrek, Nuno Sousa Pereira, and Mark V. Pauly

Keywords

Related Articles

Error Parsing: An alternative method of implementing social judgment theory

We present a novel method of judgment analysis called Error Parsing, based upon an alternative method of implementing Social Judgment Theory (SJT). SJT and Error Parsing both posit the same three components of error in h...

It must be awful for them: Perspective and task context affects ratings for health conditions.

When survey respondents rate the quality of life (QoL) associated with a health condition, they must not only evaluate the health condition itself, but must also interpret the meaning of the rating scale in order to assi...

The beauty of simple models: Themes in recognition heuristic research

The advantage of models that do not use flexible parameters is that one can precisely show to what degree they predict behavior, and in what situations. In three issues of this journal, the recognition heuristic has been...

Consumers can make decisions in as little as a third of a second

We make hundreds of decisions every day, many of them extremely quickly and without much explicit deliberation. This motivates two important open questions: What is the minimum time required to make choices with above ch...

The effect of incentive structure on search in the secretary problem

We tested the effectiveness of performance-based incentive structures using three incentive structures — commission base, best only and flat fee — and two levels of context — no context and house-selling — in an experime...

Download PDF file
  • EP ID EP677656
  • DOI -
  • Views 172
  • Downloads 0

How To Cite

Li-Wei Chao, Helena Szrek, Nuno Sousa Pereira, and Mark V. Pauly (2009). Time preference and its relationship with age, health, and survival probability. Judgment and Decision Making, 4(1), -. https://europub.co.uk./articles/-A-677656