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Optimal Expectations and Limited Medical Testing: Evidence from Huntington Disease

Listed author(s):
  • Emily Oster
  • Ira Shoulson
  • E. Ray Dorsey

We use novel data to study genetic testing among individuals at risk for Huntington disease (HD), a hereditary disease with limited life expectancy. Although genetic testing is perfectly predictive and carries little economic cost, presymptomatic testing is rare. Testing rates increase with increases in ex ante risk of having HD. Untested individuals express optimistic beliefs about their health and make decisions (e.g., retirement) as if they do not have HD, even though individuals with confirmed HD behave differently. We suggest that these facts can be reconciled by an optimal expectations model (Brunnermeier and Parker 2005). (JEL D84, I12)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.2.804
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File URL: http://www.aeaweb.org/aer/data/april2013/20111522_data.zip
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 103 (2013)
Issue (Month): 2 (April)
Pages: 804-830

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Handle: RePEc:aea:aecrev:v:103:y:2013:i:2:p:804-30
Note: DOI: 10.1257/aer.103.2.804
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  1. Andrew Caplin & John Leahy, 2001. "Psychological Expected Utility Theory and Anticipatory Feelings," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 55-79.
  2. Koszegi, Botond, 2003. "Health anxiety and patient behavior," Journal of Health Economics, Elsevier, vol. 22(6), pages 1073-1084, November.
  3. Rebecca L. Thornton, 2008. "The Demand for, and Impact of, Learning HIV Status," American Economic Review, American Economic Association, vol. 98(5), pages 1829-1863, December.
  4. Guy Mayraz, 2011. "Priors and Desires," CEP Discussion Papers dp1047, Centre for Economic Performance, LSE.
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