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Saving future lives. A comparison of three discounting models

Author

Listed:
  • John A. Cairns

    (Health Economics Research Unit, University of Aberdeen, UK)

  • Marjon M. Van Der Pol

    (Health Economics Research Unit, University of Aberdeen, UK)

Abstract

This paper compares three models of intertemporal choice concerning saving future lives: the constant discounting model, the proportional discounting model and the hyperbolic discounting model. The three models were investigated using data collected from the general public. Since these data have a multilevel structure, ordinary least-squares (OLS) estimates were supplemented by multilevel analysis. There is evidence in favour of the proportional (and to a lesser extent) the hyperbolic model over the constant discounting model. There is clear evidence for this data set that multilevel analysis is more appropriate than OLS. © 1997 John Wiley & Sons, Ltd.

Suggested Citation

  • John A. Cairns & Marjon M. Van Der Pol, 1997. "Saving future lives. A comparison of three discounting models," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 341-350.
  • Handle: RePEc:wly:hlthec:v:6:y:1997:i:4:p:341-350
    DOI: 10.1002/(SICI)1099-1050(199707)6:4<341::AID-HEC277>3.0.CO;2-Y
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    Citations

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    Cited by:

    1. Marjon M. Van Der Pol & John A. Cairns, 2000. "Negative and zero time preference for health," Health Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 171-175.
    2. Arthur E. Attema & Matthijs M. Versteegh, 2013. "Would You Rather Be Ill Now, Or Later?," Health Economics, John Wiley & Sons, Ltd., vol. 22(12), pages 1496-1506, December.
    3. S. Höjgård & U. Enemark & C. H. Lyttkens & A. Lindgren & T. Troëng & H. Weibull, 2002. "Discounting and clinical decision making: Physicians, patients, the general public, and the management of asymptomatic abdominal aortic aneurysms," Health Economics, John Wiley & Sons, Ltd., vol. 11(4), pages 355-370.
    4. Jamison Dean T. & Jamison Julian, 2011. "Characterizing the Amount and Speed of Discounting Procedures," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(2), pages 1-56, April.
    5. Anne Spencer, 2001. "The Time Trade-Off Method: An Exploratory Study," Working Papers 437, Queen Mary University of London, School of Economics and Finance.
    6. Andrew Meyer, 2013. "Estimating discount factors for public and private goods and testing competing discounting hypotheses," Journal of Risk and Uncertainty, Springer, vol. 46(2), pages 133-173, April.
    7. Settle, Chad & Shogren, Jason F., 2004. "Hyperbolic discounting and time inconsistency in a native-exotic species conflict," Resource and Energy Economics, Elsevier, vol. 26(2), pages 255-274, June.
    8. Boyle, Patricia A & Yu, Lei & Segawa, Eisuke & Wilson, Robert S & Buchman, Aron S & Laibson, David I. & Bennett, David A, 2012. "Association of cognition with temporal discounting in community based older persons," Scholarly Articles 11726269, Harvard University Department of Economics.
    9. McDonald, R.L. & Chilton, S.M. & Jones-Lee, M.W. & Metcalf, H.R.T., 2017. "Evidence of variable discount rates and non-standard discounting in mortality risk valuation," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 152-167.
    10. Han Bleichrodt & Jose Luis Pinto, 2012. "Conceptual Foundations for Health Utility Measurement," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 35 Edward Elgar Publishing.
    11. Bleichrodt, Han & Quiggin, John, 1999. "Life-cycle preferences over consumption and health: when is cost-effectiveness analysis equivalent to cost-benefit analysis?," Journal of Health Economics, Elsevier, vol. 18(6), pages 681-708, December.
    12. Cairns, John & van der Pol, Marjon, 2000. "Valuing future private and social benefits: The discounted utility model versus hyperbolic discounting models," Journal of Economic Psychology, Elsevier, vol. 21(2), pages 191-205, April.
    13. Han Bleichrodt, 2002. "A new explanation for the difference between time trade-off utilities and standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 447-456.

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