Comparing time and risk preferences across three post-industrial UK cities

Area of Science:

• Behavioral Economics
• Public Health
• Health Economics

Background:

• Individual differences in time and risk preferences are significant but their determinants are not fully understood.
• Geographical variations in these preferences, particularly in relation to health outcomes, remain under-explored.
• The 'Glasgow effect,' referring to higher mortality in Glasgow beyond socioeconomic factors, necessitates investigation into potential contributing factors like behavioral preferences.

Purpose of the Study:

• To investigate whether geographical location influences individual time and risk preferences.
• To explore the potential role of these preferences in understanding geographical health disparities, specifically the 'Glasgow effect'.

Main Methods:

• Survey data collected from 3702 individuals across Glasgow, Manchester, and Liverpool between July and November 2011.
• Analysis of time preference rates and risk-seeking behaviors across the three geographical locations.
• Statistical comparison of preference heterogeneity between the cities.

Main Results:

• Evidence of significant geographical heterogeneity in time and risk preferences was found.
• Contrary to the hypothesis, individuals in Glasgow exhibited a lower time preference rate compared to other locations.
• Glasgow residents were more risk-seeking than those in Liverpool and more likely to be extremely risk-seeking than those in Manchester.

Conclusions:

• Geographical location is a determinant of individual time and risk preferences.
• Observed differences in risk-seeking and time preferences in Glasgow do not appear to explain the excess mortality, as they work in opposing directions regarding health investments.
• While risk preferences in Glasgow might suggest higher engagement in risky health behaviors, their future orientation suggests otherwise, complicating direct links to mortality rates.