A Triple Test for Behavioral Economics Models and Public Health Policy

TY - JOUR

T1 - A Triple Test for Behavioral Economics Models and Public Health Policy

AU - Nakamura, Ryota

AU - Suhrcke, Marc

AU - Zizzo, Daniel John

N1 - © The Author(s) 2017. This article is an open access publication

PY - 2017/12/1

Y1 - 2017/12/1

N2 - We propose a triple test to evaluate the usefulness of behavioral economics models for public health policy. Test 1 is whether the model provides reasonably new insights. Test 2 is on whether these have been properly applied to policy settings. Test 3 is whether they are corroborated by evidence. We exemplify by considering the cases of social interactions models, self-control models and, in relation to health message framing, prospect theory. Out of these sets of models, only a correctly applied prospect theory fully passes the tests at present. Specifically, in broad agreement with the evidence, a gain frame has positive implications for welfare encourages disease prevention activity, though this does not apply if the perceived probability of the bad health outcome is large enough. We see our tests as being useful to identify how much health policy weight policy-makers should assign to specific behavioral economic models; they are also useful to verify what next steps would be most useful in further research.

AB - We propose a triple test to evaluate the usefulness of behavioral economics models for public health policy. Test 1 is whether the model provides reasonably new insights. Test 2 is on whether these have been properly applied to policy settings. Test 3 is whether they are corroborated by evidence. We exemplify by considering the cases of social interactions models, self-control models and, in relation to health message framing, prospect theory. Out of these sets of models, only a correctly applied prospect theory fully passes the tests at present. Specifically, in broad agreement with the evidence, a gain frame has positive implications for welfare encourages disease prevention activity, though this does not apply if the perceived probability of the bad health outcome is large enough. We see our tests as being useful to identify how much health policy weight policy-makers should assign to specific behavioral economic models; they are also useful to verify what next steps would be most useful in further research.

KW - behavioral economics

KW - nudges

KW - peer effects

KW - self-control

KW - prospect theory

KW - framing effect

UR - http://www.scopus.com/inward/record.url?scp=85024490869&partnerID=8YFLogxK

U2 - 10.1007/s11238-017-9625-9

DO - 10.1007/s11238-017-9625-9

M3 - Article

SN - 0040-5833

VL - 83

SP - 513

EP - 533

JO - THEORY AND DECISION

JF - THEORY AND DECISION

IS - 4

ER -