Intertemporal Preferences or (In)Attention to Future Costs: Identifying Factors Influencing Variation in Health Behaviors

Authors

Christopher Gustafson, University of Nebraska-LincolnFollow

Date of this Version

8-2-2023

Citation

Cornhusker Economics. agecon.unl.edu/cornhuskereconomics

Comments

Used by permission.

Abstract

When you have the urge to buy a fancy coffee drink at your favorite coffee place, do you think about alternative future uses of the money that you would spend on the drink? If, in the end, you decide to forego buying the drink to save money, you have, by definition, considered what you are giving up now—the drink—in order to have the money later, but many people may not consider the future opportunities they forego when they make decisions now. Research suggests that this asymmetric attention to immediate versus future opportunity costs— the benefits that we give up when we make a choice, such as the drink we don’t get so that we can save money, or the thing we could have purchased in the future if we do buy the drink—is common even in decision contexts frequently used in research to study how people discount future vs. immediate benefits.