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Obesity and Hyperbolic Discounting: An Experimental Analysis

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  • Richards, Timothy J.
  • Hamilton, Stephen F.
  • Pofahl, Geoffrey M.

Abstract

Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, we develop a model of present bias and apparently hyperbolic discounting that is fully consistent with rational behavior. We construct an experiment to test our hypothesis and to determine whether discount rates differ for individuals who engage in behaviors that could endanger their health. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term gratification, rather than taxing foods directly.

Suggested Citation

  • Richards, Timothy J. & Hamilton, Stephen F. & Pofahl, Geoffrey M., 2010. "Obesity and Hyperbolic Discounting: An Experimental Analysis," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61186, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61186
    DOI: 10.22004/ag.econ.61186
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    Cited by:

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    2. Therese Grijalva & Jayson Lusk & W. Shaw, 2014. "Discounting the Distant Future: An Experimental Investigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(1), pages 39-63, September.
    3. Chiara Pastore & Stefanie Schurer & Agnieszka Tymula & Nicholas Fuller & Ian Caterson, 2023. "Economic preferences and obesity: Evidence from a clinical lab‐in‐field study," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 2147-2167, September.
    4. Paul Calcott, 2022. "Regulating ingredients in sin goods," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(3), pages 1120-1139, May.
    5. Vasilios Kosteas, 2015. "Physical activity and time preference," International Journal of Health Economics and Management, Springer, vol. 15(4), pages 361-386, December.
    6. Green, Gareth P. & Richards, Timothy J., 2018. "Discounting Environmental Goods," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    7. Tatiana Kossova & Elena Kossova & Maria Sheluntcova, 2017. "Alcohol consumption and individual time preferences of Russians," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(1), pages 47-85, March.
    8. Israel, Avi & Rosenboim, Mosi & Shavit, Tal, 2022. "The effect of SMS notifications on time preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    9. Joseph K Goodman & Selin A Malkoc & Mosi Rosenboim, 2019. "The Material-Experiential Asymmetry in Discounting: When Experiential Purchases Lead to More Impatience," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 46(4), pages 671-688.
    10. Ouayogodé, Mariétou H., 2016. "Effectiveness of weight loss intervention in highly-motivated people," Economics & Human Biology, Elsevier, vol. 23(C), pages 263-282.
    11. Pastore, Chiara & Schurer, Stefanie & Tymula, Agnieszka & Fuller, Nicholas & Caterson, Ian, 2020. "Economic Preferences and Obesity: Evidence from a Clinical Lab-in-Field Experiment," IZA Discussion Papers 13915, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Health Economics and Policy; Institutional and Behavioral Economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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