On fatalistic long-term health behavior
Many adults have an overly pessimistic view of old age because they fail to correctly predict their ability to hedonically adapt to old-age health related problems. A standard utility model where the marginal utility of health is higher at a lower level of health predicts that this overly pessimist view raises the incentive for healthy behavior. But this is at odds with empirical research that indicates that people with more negative aging stereotypes tend to adopt less healthy practices, transforming this negative view into a self-fulfilling prophecy. The aim of this note is to show that this fatalistic behavior can be explained through prospect theory by modelling this overly pessimistic view of old age as a failure to predict the change in the reference point due to hedonic adaptation. Given the diminishing sensitivity in the loss domain, people undervalue the future marginal value of health investment and may therefore underinvest in health as long as loss aversion is not too strong.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Thaler, 1985.
"Mental Accounting and Consumer Choice,"
INFORMS, vol. 4(3), pages 199-214.
- Oswald, Andrew J. & Powdthavee, Nattavudh, 2008.
"Does happiness adapt? A longitudinal study of disability with implications for economists and judges,"
Journal of Public Economics,
Elsevier, vol. 92(5-6), pages 1061-1077, June.
- Oswald, Andrew J. & Powdthavee, Nattavudh, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA).
- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Albrecht, Gary L. & Devlieger, Patrick J., 1999. "The disability paradox: high quality of life against all odds," Social Science & Medicine, Elsevier, vol. 48(8), pages 977-988, April.
- David G. Blanchflower & Andrew Oswald, 2007.
"Is Well-being U-Shaped over the Life Cycle?,"
NBER Working Papers
12935, National Bureau of Economic Research, Inc.
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-Being U-Shaped over the Life Cycle?," IZA Discussion Papers 3075, Institute for the Study of Labor (IZA).
- 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 223-55, March-Apr.
- Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
- Heather Lacey & Dylan Smith & Peter Ubel, 2006. "Hope I Die before I Get Old: Mispredicting Happiness Across the Adult Lifespan," Journal of Happiness Studies, Springer, vol. 7(2), pages 167-182, 06.
- Becca R. Levy & Martin D. Slade & Stanislav V. Kasl, 2002. "Longitudinal Benefit of Positive Self-Perceptions of Aging on Functional Health," Journals of Gerontology: Series B, Gerontological Society of America, vol. 57(5), pages P409-P417.
- Heather P. Lacey & Angela Fagerlin & George Loewenstein & Dylan M. Smith & Jason Riis & Peter A. Ubel, 2006. "It must be awful for them: Healthy people overlook disease variability in quality of life judgments," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 1, pages 146-152, November.
- Wu, Stephen, 2001. "Adapting to heart conditions: a test of the hedonic treadmill," Journal of Health Economics, Elsevier, vol. 20(4), pages 495-507, July.
When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:32:y:2011:i:3:p:434-439. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.