Evidence for Opportunity Cost Neglect in the Poor.

People often neglect opportunity costs: They do not fully take into account forgone alternatives outside of a particular choice set. Several scholars have suggested that poor people should be more likely to spontaneously consider opportunity costs, because budget constraints should lead to an increased focus on trade-offs. We did not find support for this hypothesis in five high-powered experiments (total N = 2325). The experiments used different products (both material and experiential) with both high and low prices (from $8.50 to $249.99) and different methods of reminding participants of opportunity costs. High-income and low-income participants showed an equally strong decrease in willingness to buy when reminded of opportunity costs, implying that both the rich and the poor neglect opportunity costs.

The elusive constellations of poverty.

Pepper & Nettle describe possible processes underlying what they call a behavioral constellation of deprivation (BCD). Although we are certain about the application of evolutionary models to our understanding of poverty, we are less certain about the utility of behavioral constellations. The empirical record on poverty-related behaviors is much more divergent and broad than such constellations suggest.

Comprehensively Measuring Health-Related Subjective Well-Being: Dimensionality Analysis for Improved Outcome Assessment in Health Economics.

BACKGROUND: Allocation of inevitably limited financial resources for health care requires assessment of an intervention's effectiveness. Interventions likely affect quality of life (QOL) more broadly than is measurable with commonly used health-related QOL utility scales. In line with the World Health Organization's definition of health, a recent Delphi procedure showed that assessment needs to put more emphasis on mental and social dimensions. OBJECTIVE: To identify the core dimensions of health-related subjective well-being (HR-SWB) for a new, more comprehensive outcome measure. METHODS: We formulated items for each domain of an initial Delphi-based set of 21 domains of HR-SWB. We tested these items in a large sample (N = 1143) and used dimensionality analyses to find a smaller number of latent factors. RESULTS: Exploratory factor analysis suggested a five-factor model, which explained 65% of the total variance. Factors related to physical independence, positive affect, negative affect, autonomy, and personal growth. Correlations between the factors ranged from 0.19 to 0.59. A closer inspection of the factors revealed an overlap between the newly identified core dimensions of HR-SWB and the validation scales, but the dimensions of HR-SWB also seemed to reflect additional aspects. This shows that the dimensions of HR-SWB we identified go beyond the existing health-related QOL instruments. CONCLUSIONS: We identified a set of five key dimensions to be included in a new, comprehensive measure of HR-SWB that reliably captures these dimensions and fills in the gaps of the existent measures used in economic evaluations.