Prudence and prevention: Empirical evidence

Arbeitspapier

Theoretical papers show that optimal prevention decisions in the sense of selfprotection (i.e., primary prevention) depend not only on the level of (second-order) risk aversion but also on higher-order risk preferences such as prudence (third-order risk aversion). We study empirically whether these theoretical results hold and whether prudent individuals show less preventive (self-protection) effort than non-prudent individuals. We use a unique dataset that combines data on higher-order risk preferences and various measures of observed real-world prevention behavior. We find that prudent individuals indeed invest less in self-protection as measured by influenza vaccination. This result is driven by high risk individuals such as individuals >60 years of age or chronically ill. We do not find a clear empirical relationship between riskpreferences and prevention in the sense of self-insurance (i.e. secondary prevention). Neither risk aversion nor prudence is related to cancer screenings such as mammograms, Pap smears or X-rays of the lung.

Object Details

• ISBN: 978-3-96973-000-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 863

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis ; Criteria for Decision-Making under Risk and Uncertainty ; Health Behavior
• Subject: prudence ; risk preferences ; prevention ; vaccination ; screening

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mayrhofer, Thomas ; Schmitz, Hendrik
• Event: Veröffentlichung
• (who): RWI - Leibniz-Institut für Wirtschaftsforschung
• (where): Essen
• (when): 2020

Further information

• DOI: doi:10.4419/96973000
• Handle: http://hdl.handle.net/10419/224092
• Last update: 10.03.2025, 11:45 AM CET