Agricultural Economics Department


Date of this Version



Cornhuskers Economics, University of Nebraska- Lincoln Extension, September 9, 2014.


Copyright 2014 University of Nebraska. Used by permission.


Non-communicable diseases (NCD) such as cancer diabetes, and heart disease im-pose significant human and economic costs. The occurrence of NCDs is the result of multiple factors; in many cases, individ-ual choices increase or decrease the likelihood that these diseases will occur. Preventive behaviors, though effective at preventing the occurrence of many of these diseases, are adopted less frequently than would be optimal. Behavioral economics, a field of economics that has integrated findings from psychology into the economic model of choice, provides important insights into why people take preventive measures less frequently than they should. Behavioral economic models are particularly important under certain conditions, and a few that are relevant to health are highlighted here. Many people are present-biased—they want to receive benefits im-mediately and to postpone costs—so when the costs and benefits of individuals’ deci-sions occur at different points in time, individuals tend to overweight immediate benefits and underweight future costs. Second, people have finite self-control which particularly affects decision-making when combined with fluctuating physical or emotional states—hunger or stress, for instance. For instance, people make more cognitive errors when they experience stress than under normal conditions (Mani et al., 2013).