OBESITY AND HYPERBOLIC DISCOUNTING: AN EXPERIMENTAL ANALYSIS

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.


Issue Date:
2010
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/116410
Total Pages:
32
JEL Codes:
C91; D12; D91; I18




 Record created 2017-04-01, last modified 2017-08-26

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)