Valuing Sequences of Lives Lost or Saved Over Time: Preference for Uniform Sequences

Abstract

Policymakers often make decisions involving human-mortality risks and monetary outcomes that span across different time periods and horizons. Many projects or environmental-regulation policies involving risks to life, such as toxic exposures, are experienced over time. The preferences of individuals on lives lost or saved over time should be understood to implement effective policies. Using a within-subject survey design, we investigated our participants’ elicited preferences (in the form of ratings) for sequences of lives saved or lost over time at the participant level. The design of our study allowed us to directly observe the possible preference patterns of negative time discounting or a preference for spreading from the responses. Additionally, we embedded factors associated with three other prevalent anomalies of intertemporal choice (gain/loss asymmetry, short/long asymmetry, and the absolute magnitude effect) into our study for control. We find that our participants exhibit three of the anomalies: preference for spreading, absolute magnitude effect, and short/long-term asymmetry. Furthermore, fitting the data collected, Loewenstein and Prelec’s model for the valuation of sequences of outcomes allowed for a more thorough understanding of the factors influencing the individual participants’ preferences. Based on the results, the standard discounting model does not accurately reflect the value that some people place on sequences of mortality outcomes. Preferences for uniform sequences should be considered in policymaking rather than applying the standard discounting model.