Time-inconsistent health behavior and its impact on aging and longevity

Area of Science:

• Gerontology
• Health Economics
• Behavioral Economics

Background:

• Time-inconsistent decision-making, driven by hyperbolic discounting, influences health behaviors.
• Individuals aim to invest in health and reduce unhealthy consumption (e.g., smoking) over their lifecycle.
• Aging and longevity are endogenous, affected by individual choices.

Purpose of the Study:

• To integrate hyperbolic discounting into a life cycle model with endogenous aging and longevity.
• To analyze the health consequences of time-inconsistent preferences on aging and lifespan.
• To evaluate policy interventions for promoting healthier behaviors and increasing life value.

Main Methods:

• Development of a gerontologically founded life cycle model.
• Incorporation of time-inconsistent decision-making (hyperbolic discounting).
• Calibration of the model using U.S. data from 2012.

Main Results:

• Individuals continuously revise health plans, leading to faster health deficits and earlier death than intended.
• Time-inconsistent health behavior results in an estimated loss of approximately 4 years of life.
• Standard policy interventions (taxes, subsidies) fail to achieve the first-best time-consistent outcome.

Conclusions:

• Time-inconsistency in health decisions fundamentally shortens lifespan.
• Price policies can effectively "nudge" individuals toward healthier choices.
• Interventions can help individuals achieve their planned longevity and life value.