International College of Economics and Finance

Research seminar by Ksenia Panidi (Université Libre de Bruxelles): «Ostrich Effect in Health Care Decisions: Theory and Empirical Evidence»

On Tuesday, December 27 at 4.30 pm International College of Economics and Finance held Research seminar.
Speaker: Ksenia Panidi (Université Libre de Bruxelles)
Theme: «Ostrich Effect in Health Care Decisions: Theory and Empirical Evidence»
Venue: Pokrovski Bulvar, 11, Room Zh-822

Abstact: In this paper I study the link between loss aversion and the frequently observed tendency to avoid useful but negative information (the ostrich effect). In the context of preventive health care choices, I obtain several novel results. First, I construct a theoretical model showing that high loss aversion decreases the frequency of preventive testing due to the fear of a bad diagnosis. Second, I show that under certain conditions, increasing risk of illness discourages testing for a highly loss-averse agent. Third, I use a representative sample of the Dutch population to provide empirical evidence supporting these predictions. The main findings confirm that loss aversion, as measured by lottery choices in terms of life expectancy, is significantly and negatively associated with the decision to participate in preventive testing for hypertension, diabetes and lung disease. Higher loss aversion also leads to lower frequency of self-tests for cancer among women. Finally, the effect is more pronounced in magnitude for people with higher subjective risk of illness.

Everyone interested is welcome to attend!

Pass can be ordered by:
tel. (495)772-95-90*2659
contact: Ksenia Sanzharovskaya

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