Obesity and Hyperbolic Discounting: An Experimental Analysis
By: Richards, Timothy J.; Hamilton, Stephen F.
Richards, Timothy J.; Hamilton, Stephen F., Obesity and Hyperbolic Discounting: An Experimental Analysis, Journal of Agricultural and Resource Economics, Volume 37, Issue 2, August 2012, Pages 181-198
Models of rational addiction suggest that obesity is consistent with time-consistent preferences. Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, conduct an experiment to test whether individual discount schedules are time-consistent and whether discount rates are higher for subjects who exhibit patterns of risky behavior. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term gratification, rather than taxing foods directly