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Saving future lives. A comparison of three discounting models
Author(s) -
Cairns John A.,
Van Der Pol Marjon M.
Publication year - 1997
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199707)6:4<341::aid-hec277>3.0.co;2-y
Subject(s) - discounting , ordinary least squares , hyperbolic discounting , econometrics , multilevel model , constant (computer programming) , economics , mathematics , set (abstract data type) , mathematical economics , statistics , computer science , finance , programming language
This paper compares three models of intertemporal choice concerning saving future lives: the constant discounting model, the proportional discounting model and the hyperbolic discounting model. The three models were investigated using data collected from the general public. Since these data have a multilevel structure, ordinary least‐squares (OLS) estimates were supplemented by multilevel analysis. There is evidence in favour of the proportional (and to a lesser extent) the hyperbolic model over the constant discounting model. There is clear evidence for this data set that multilevel analysis is more appropriate than OLS. © 1997 John Wiley & Sons, Ltd.