BEHAVIOURAL ECONOMICS- THE IMPORTANCE OF ABSOLUTE AND RELATIVE HEALTH OUTCOMES

Author(s)

Van Exel J, Brouwer WBF, Erasmus University, Rotterdam, Netherlands

OBJECTIVES: In a paper in the Journal of Health Economics, Victor Fuchs (2000) stated that one of the main research tasks for health economists is to enhance our understanding of economic behaviour. One of the areas that are especially important for health economics as a behavioural science is that, contrary to traditionally assumed, people appear to be more concerned about relative than absolute levels of outcomes. METHODS: First of all, in surveys of the relation between income and wealth it was found that people take the behaviour and wealth of relevant others as reference and, by the desire to 'live up to the Joneses', adapt their preferences according to this norm (i.e., 'reference drift'). In addition, this 'wealth' norm is affected by habituation to the status quo individuals have already achieved. Each time an aspiration level is reached, the norm is raised (i.e., 'preference drift' or 'adaptive preferences'). Is the same true for health? Do people relate their health state, right to health and health care to what is viewed as 'normal' or is possible in view of relevant others' health? RESULTS: Results from two surveys undertaken among people from the general public (n=220 & n=394) demonstrate that people adapt their expectations of length and future quality of life to own health behaviour relative to that of others and to age and health status of close relatives. CONCLUSION: Therefore, after JS Mill, people do not only desire to be healthy, but also as healthy as others.

Conference/Value in Health Info

2002-11, ISPOR Europe 2002, Rotterdam, The Netherlands

Value in Health, Vol. 5, No. 6 (November/December 2002)

Code

PMD9

Topic

Economic Evaluation

Topic Subcategory

Cost/Cost of Illness/Resource Use Studies

Disease

Multiple Diseases

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