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Addiction and discounting.

A L Bretteville-Jensen1

  • 1National Institute for Alcohol and Drug Research, Oslo, Norway. alb@sifa.no

Journal of Health Economics
|October 28, 1999
PubMed
Summary

Rational addiction theory suggests people make addictive choices rationally. This study found discount rates differ between users and non-users, and even between active and former users, challenging the theory's stability assumption.

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Area of Science:

  • Behavioral Economics
  • Addiction Science
  • Psychology

Background:

  • Becker and Murphy's 1988 theory proposed rational decision-making applies to addiction.
  • The theory assumes stable time preferences across individuals and over time.

Purpose of the Study:

  • To test the assumptions of interpersonal variation and temporal stability in rational addiction theory.
  • To investigate time preferences in individuals with varying levels of illegal substance use.

Main Methods:

  • Estimation of time preferences (discount rates) using data from three distinct groups.
  • Comparison of discount rates between active drug users (heroin, amphetamine), former users, and non-users.

Main Results:

  • Active injectors exhibited higher discount rates than non-users.
  • Significant differences in discount rates were observed between active and former drug users.
  • Findings challenge the assumption of stability in time preferences as proposed by Becker and Murphy.

Conclusions:

  • High time-preference rates may contribute to addiction onset.
  • Addiction itself might alter individuals' inter-temporal decision-making equilibrium.
  • The stability assumption of rational addiction theory requires further empirical investigation.

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