| |
Your
own discount rate for money can be calculated from your answer
to the first question. $600 would represent a 20% discount rate,
$1000 would represent a 100% discount rate, and so on. In an
analogous way it is also possible to calculate your discount rate
for health from your answer to Question #2. Most analyses have
used discount rates of 5% or less for both the financial and health
domains (Weinstein
et al., 1996). However, some studies have found that people,
especially young people, exhibit discount rates of up to several
hundred per cent in the health domain (Chapman,
1996; Chapman
and Elstein, 1995)! This amazing finding has a troubling implication.
If a person’s annual discount rate for health is truly 100% per
cent, this implies that almost no long-term investment in one’s
health would ever be advisable. For example, exercise now would
only be worthwhile ten years from now if my health status doubled
each of the next ten years—not a likely prospect. Nearly any
behavior designed to improve one’s future health, such as losing
weight or stopping smoking, will be unlikely to be undertaken
by young people, whose discount rates tend to be the highest.
A
second finding pertaining to discount rates is depicted in Figure
1.
Figure 1 contains the dilemma of the ages: Should I choose the
option which promises a smaller reward after a brief delay or
the option which promises the larger reward after a longer delay?
Because discounting curves are hyperbolic
(Kirby and
Herrnstein, 1995), the curves cross as time elapses.
When both rewards are in the distant future, the larger reward
has more value in the present than does the smaller one. Thus
it is possible for the decision maker to choose the better option.
As time passes, that is, as both rewards become less distant,
the present value of the smaller reward eventually exceeds that
of the large reward. Now the impulsive choice is made. For example,
as I contemplate holiday meals much later this year, both the
enjoyment of the huge meals and the health benefits which would
occur if I controlled myself are both far in the future. The
latter benefits are more important than the former, as I now consider
them. When Thanksgiving occurs, however, the gustatory benefits
are immediate, and only the health benefits are delayed. The
curves have crossed, as my preference order has reversed. Thus
I ignore long-term health benefits as I help myself to thirds
both on the main course and dessert. Similarly, a person’s own
best long-term interests are in place as solemn promises are made
in the physician’s office. When the choice point is reached,
however, the present seems much more compelling than the future.
|
