Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, April 11, 2005

Pain Relief and Time Preference

Many people taking Celebrex or Bextra or similar pain relievers do not much care about the health risks -- the medication helps alleviate their pain and that is all that matters to them. See, for example, Warnings Aside, Some Still Want Their Painkillers. [registration required; thanks to BrianF for the link]
As Pfizer removed Bextra from the market this week under pressure from federal drug regulators who also issued broad warnings that other popular painkillers could hurt the heart, stomach or skin, people who rely on such drugs responded with dismay and a sense of weariness.
In interviews around the country on Friday, many people expressed skepticism about the new warnings and said they would rather tolerate health risks than constant pain.

There are two reasons for this reaction.

The first reason is the standard neo-classical economics one: the individuals do not have to bear much, if any, of the financial cost of future healthcare if they suffer heart or other health problems; this explanation applies to those who have generous and/or socialized health plans.

The second is probably stronger, but just as plausibly neo-classical economics: pain sharply elevates an individual's time preference. From Wikipedia:

Time preference is the economist's assumption that a consumer will place a premium on enjoyment nearer in time over more remote enjoyment. A high time preference means a person wants to spend their money now and not save it, whereas a low time preference means a person might want to save their money as well.

When people are in great pain, they don't much care about the future; they want the pain relieved. However, once the pain is relieved, they tend to lower their time preferences. The combined effect is that when people are on pain relievers, they might think about and be concerned about future costs; but when they think about the pain they might be experiencing without the pain-relievers, their concern shifts dramatically to the present.
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