Preferences, expectations, and the prediction of health and economic behavior

Univ Of North Carolina Chapel Hill, Chapel Hill NC

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Abstract

DESCRIPTION (provided by applicant): HIV/AIDS has led to substantial declines in life expectancy in many parts of Africa. This may be causing people to alter their forward-looking behaviors in ways that are deleterious to future development prospects. At the same time, there is an increasing emphasis on the scale-up of HIV prevention interventions such as male circumcision. Understanding people's behavioral responses to declining life expectancy and their decisions to take-up prevention interventions requires data on their risk preferences, inter-temporal preferences, and subjective life expectancy - all of which play a central role in models of individual decision-making. However, these attitudes are rarely measured in population-based socio-economic surveys in developing countries. The career development activities in this application will allow me to combine insights from economics and psychology and apply them in ways that provide a better understanding of individuals' health behaviors as well as their behavioral responses to reduced life expectancy. I will measure and validate individuals' preferences and expectations using state-of-the-art techniques and I will examine how people form, and revise, these attitudes. Specific aims include: (1) empirical examination and evaluation of survey- and experiment-based approaches to the elicitation of risk preferences, inter-temporal preferences, and survival expectations; (2) development of direct measures of these preferences and expectations for socio-economic surveys in Kenya; (3) an examination of the predictive power of these measures when studying the take-up of beneficial health interventions such as male circumcision; and (4) implementation of studies that will use data on survival expectations and establish their causal effect on individuals' investment behavior. The training component will enable me to (a) review methods and tools used to understand and measure preferences and expectations in psychology, and (b) gain practical experience in using data from Mexico on risk and inter-temporal preferences. The training program will put me in a position to become an independent scientist who integrates ideas from economics and psychology in order to arrive at a richer understanding of decision-making.