For Better or Worse? Subjective Expectations and Cost-Benefit Trade-Offs in Health Behavior: An Application to Lockdown Compliance in the United Kingdom

Health behaviors are actions individuals take that affect their health. Most health behaviors can have both positive and negative consequences for the individual, generating trade-offs in choice. During the acute phases of the COVID-19 pandemic, social distancing and the more extreme self-isolation and shielding were the main actions through which people could (were required to) protect themselves and others from infection and its health-harming consequences. Distancing and isolation, however, are not without costs or risks for individuals’ wellbeing. Because the costs and benefits of alternative actions are ex ante uncertain, individual choices depend on decision makers’ expectations over choice consequences and on how they resolve the trade-offs between expected costs and benefits. Using rich data on subjective expectations collected during the first UK lockdown, we first document people’s perceived costs (risks) and benefits (returns) of alternative compliance behaviors along with their compliance plans. We then develop and estimate a simple model of compliance behavior with uncertain costs and benefits, which we use to quantify the utility trade-offs underlying compliance, decompose group differences in compliance into components attributable to variation in expectations vis-`a-vis preferences, and compute the compensation required for people to be isolated. In a short follow-up, we implement a randomized sensitization intervention reviewing the timeline of the “Cummings affair†. Labour supporters react to the treatment’s negative prompt by lowering their subjective probability of never leaving home (the government’s recommendation) and increasing that of discretionary compliance.