Time preference for health gains versus health losses

The purpose of this research was to determine whether people devalue further health gains differently from future health losses. 108 subjects in various states of health were randomised to groups that rated their preference for a hypothetical health gain or loss of variable duration and delay, in the condition of arthritis. Direction and duration of the hypothetical future health change had an interactive effect on time preference (p less than 0.001). For the health gain, devaluation due to delay was consistent across durations. For the health loss, devaluation depended on duration; the long-duration loss was devalued with delay while the fleeting loss was inflated. These findings cast doubt on the assumptions of positive time preference and constant rate discounting that underlie the classical model of discounting. They provide support for a theory of intertemporal choice which posits that vivid, fleeting, future events engender 'anticipation utility' which attenuates positive time preference. Our findings suggest that standard practices for discounting future health outcomes in economic evaluations of arthritis and possibly other conditions may need to be re-examined.