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Incentives and Choice in Health Care$
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Frank A. Sloan and Hirschel Kasper

Print publication date: 2008

Print ISBN-13: 9780262195775

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262195775.001.0001

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PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2018. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 24 October 2019

Reefer Madness, Frank the Tank, or Pretty Woman: To What Extent Do Addictive Behaviors Respond to Incentives?

Reefer Madness, Frank the Tank, or Pretty Woman: To What Extent Do Addictive Behaviors Respond to Incentives?

Chapter:
(p.163) 7 Reefer Madness, Frank the Tank, or Pretty Woman: To What Extent Do Addictive Behaviors Respond to Incentives?
Source:
Incentives and Choice in Health Care
Author(s):

John Cawley

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262195775.003.0007

This chapter examines different kinds of health behavior that are important inputs in the production of health, with an emphasis on the effects of incentives on habitual or addictive behaviors such as alcohol consumption, smoking, drug use, sex, and obesity-related behaviors such as diet and physical exercise. In economics, an addictive activity has three characteristics: tolerance, withdrawal, and reinforcement. The chapter first describes three competing social science models of addictive behavior and their implications for public policy: the irrational actor model, the perfectly rational actor model, and the imperfectly rational actor model. It then discusses whether incentives such as prices and non-price costs influence addictive behaviors, derived demand and peer effects, and the link between time-inconsistent preferences and addictive behaviors.

Keywords:   health behavior, incentives, addictive behaviors, public policy, irrational actor model, perfectly rational actor model, imperfectly rational actor model, prices, derived demand, time-inconsistent preferences

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