Why do We Avoid Doctors? The View from Behavioral Economics Standpoint
32 Pages Posted: 27 Jun 2008
Date Written: February 20, 2008
Some people visit doctors very rarely because of a fear to receive negative results of medical inspection, others prefer to resort to medical services in order to prevent any diseases. Recent research in the field of Behavioral Economics suggests that human's preferences may be significantly influenced by the choice of a reference point. It seems natural to think that the same is true for health consumption. This paper considers a model with reference-dependent utility that allows to characterize how people choose their health care strategy, namely, the frequency of visiting doctors. The study focuses on the effect of loss aversion as potential factor that may lead to considerable delays in seeking medical advice. The model constructed in the paper shows that loss-avers agents may have incentives to avoid visiting the doctor under high risk of illness and when the net benefits of treatment are sufficiently low.
Keywords: loss aversion, health anxiety, reference-dependent preferences, anticipation, preference for uncertainty
JEL Classification: D81, D84, I19
Suggested Citation: Suggested Citation