Behavioural Economics and Health

Review of Paper by By Judd B. Kessler and C. Yiwei Zhang

Content

• Definitions• Behavioural economics (BE) assumption• Health Behaviours• Four major areas in BE• My opinion• Questions

What is behavioural economics?

• Combination of economics and psychology in how individuals human behaviour is changed

• Effects of psychological, social and emotional factors on economic decisions of individuals

BE Assumptions Individuals are fully rational• Interventions are needed by policy makers when an individual is unable to

help him/herself e.g. loans for medication

Individuals are completely selfish• When decision affects other people eg when one does not take heart attack

medication and gvt (tax payers) has to intervene to assist when s/he has an attack

Individuals are forward thinking decision makers• Individuals think of the future than the present

• Why do individuals deviate from these assumptions???

3 Health Behaviours

Medication Adherence• Not taking medication ca lead to serious health costs

Obesity and weight control• Decrease will result in improvements to health and costs

Medical donations• Bone marrow, organ, blood, organs etc

Reward incentives

• Individuals are motivated to leave healthy lifestyles and behaviours if given incentives

Examples• Going to the gym• Participating in a research to quit smoking

Salience for information

• Individuals have no limit in decision making• Focus on given information onlyExamples• Labelling of food products (nutrient)• Taking of meds of one who is in pain and not

Context and framing

• Individuals make decisions based on options available to them and constraints they face

• Examples• Price tags• Money they have

Social forces

• Individuals are social animals and mirror actions of others

• change behaviour if they know they are being observed• Tend to conform to actions taken by others if they are

told of the actions others have taken• Take action more likely when asked to do so

Questions

• What do you think of the assumption that individuals have no limit in decision making?

• How does BE link with health• Is the issuing of incentives to individuals a

sustainable way of changing unhealthy behaviours?

Thank you