Research
Anderson, Lisa R, Beth A. Freeborn, Patrick McAlvanah, and Andrew L. Turscak. "Pay Every Subject or Pay Only Some?" Journal of Risk and Uncertainty, forthcoming.
Abstract: One technique employed by budget-conscious researchers is to pay only some subjects for their choices in an experiment. We test the effect of paying some subjects versus paying all subjects in the context of risk preferences, controlling for the difference in stakes induced by paying only some subjects. Over two experiments, we demonstrate that paying some subjects yields lower levels of risk aversion than paying all subjects, but more risk aversion than paying all subjects lower stakes. Paying some subjects also impacts the ordering of subjects by elicited risk aversion. Neither probability weighting nor standard experimental demographics were correlated with subjects' differences between these conditions. We exploit our multiple measurements of risk aversion to estimate a simple structural model of latent risk aversion and derive a correction factor to approximate the results as if all subjects were paid high stakes. Our findings imply that paying some subjects high stakes meaningfully impacts the elicited level of risk aversion, although it better approximates the experimental ideal of paying all subjects high stakes compared to paying all subjects lower stakes.
Bradford, David, Charles Courtemanche, Garth Heutel, Patrick Mcalvanah, and Christopher Ruhm. (2017). "Time Preferences and Consumer Behavior," Journal of Risk and Uncertainty, 2017, 55: 119. https://doi.org/10.1007/s11166-018-9272-8
Abstract: We investigate the predictive power of survey-elicited time preferences using a representative sample of US residents. In regressions controlling for demographics and risk preferences, we show that the discount factor elicited from choice experiments using multiple price lists and real payments predicts various health, energy, and financial outcomes, including overall self-reported health, smoking, drinking, car fuel efficiency, and credit card balance. We allow for time-inconsistent preferences and find that the long-run and present bias discount factors (β and δ) are each significantly associated in the expected direction with several of these outcomes. Finally, we explore alternate measures of time preference. Elicited monetary discount factors are correlated with several such measures, including self-reported willpower. A multiple proxies approach using these alternate measures shows that our estimated associations between the monetary discount factor and health, energy, and financial outcomes may be conservative.
Media: Vox: Short-run Impulsiveness versus Long-run Patience
Clanton, Jesse, Aimee Gardner, Michael Subichin, Patrick McAlvanah, William Hardy, Amar Shah, and Joel Porter. (2017). “Patient Hand-Off and Evaluation (PHONE) Study: A Randomized Trial of Patient Handoff Methods,” American Journal of Surgery, Volume 213, Issue 2, February 2017, 299-306.
Abstract: As residency work hour restrictions have tightened, transitions of care have become more frequent. Many institutions dedicate significant time and resources to patient handoffs despite the fact that the ideal method is relatively unknown. We sought to compare the effect of a rigorous formal handoff approach to a minimized but focused handoff process on patient outcomes. A randomized prospective trial was conducted at a large teaching hospital over ten months. Patients were assigned to services employing either formal or focused handoffs. Residents were trained on handoff techniques and then observed by trained researchers. Outcome data including mortality, negative events, adverse events, and length of stay were collected and compared between formal and focused handoff groups using t-tests and a multivariate regression analysis. A total of 5157 unique patient-admissions were stratified into the two study groups. Focused handoffs were significantly shorter and included fewer patients (mean 6.3 patients discussed over 6.7 min vs. 35.2 patients over 20.6 min, both p < 0.001). Adverse events occurred during 16.7% of patient admissions. While overall length of stay was slightly shorter in the formal handoff group (5.50 days vs 5.88 days, p = 0.024) in univariate analysis only, there were no significant differences in patient outcomes between the two handoff methods (all p > 0.05). This large randomized trial comparing two contrasting handoff techniques demonstrated no clinically significant differences in patient outcomes. A minimalistic handoff process may save time and resources without negatively affecting patient outcomes.
Courtemanche, Charles, Garth Heutel, and Patrick McAlvanah. (2015). "Impatience, Incentives, and Obesity," Economic Journal, Volume 125, Issue 582, pages 1-31, February 2015.
Abstract: This paper explores the relationship between time preferences, economic incentives, and body mass index (BMI). Using data from the 2006 National Longitudinal Survey of Youth, we first show that greater impatience increases BMI and the likelihood of obesity even after controlling for demographic, human capital, occupational, and financial characteristics as well as risk preference. Next, we provide evidence of an interaction effect between time preference and food prices, with cheaper food leading to the largest weight gains among those exhibiting the most impatience. The interaction of changing economic incentives with heterogeneous discounting may help explain why increases in BMI have been concentrated amongst the right tail of the distribution, where the health consequences are especially severe. Lastly, we model time-inconsistent preferences by computing individuals' quasi-hyperbolic discounting parameters (β and δ). Both long-run patience (δ) and present-bias (β) predict BMI, suggesting obesity is partly attributable to rational intertemporal tradeoffs but also partly to time inconsistency.
Media: Washington Post: Does Impatience Make Us Fat?
McAlvanah, Patrick and Charles C. Moul. (2013). "The House Doesn't Always Win: Evidence of Anchoring Among Australian Bookies," Journal of Economic Behavior and Organization 90, 2013, 87-99.
Abstract: We examine Australian horseracing bookmakers' responses to late scratches, instances in which a horse is abruptly withdrawn after betting has commenced. Our observed bookies exhibit anchoring on the original odds and fail to re-adjust odds fully on the remaining horses after a scratch, thereby earning lower profit margins and occasionally creating nominal arbitrage opportunities for bettors. We also examine which horses' odds bookies adjust after a scratch and demonstrate diminished profit margins even after controlling for these endogenous adjustments. Our results indicate that bookies' adjustments recover approximately 80% of lost profit margin but that bookies forgo the remaining 20% due to systematic under-adjustments.
McAlvanah, Patrick. (2010). "Subadditivity, Patience, and Utility: The Effects of Dividing Time Intervals," Journal of Economic Behavior and Organization 76, 2010, 325-337.
Abstract: Previous work has demonstrated that time discounting is subadditive: individuals exhibit more impatience evaluating a delay as divided into sub-intervals. This paper demonstrates that subdivision affects both components of intertemporal choice, the utility function as well as the intertemporal discount function. In my first experiment, I demonstrate that differential concavity of utility for gains and convexity for losses implies that the discounting of losses is even more subadditive than the discounting of gains. Individuals display even more relative impatience over divided time intervals for negative amounts of money than for positive amounts of money. My second experiment utilizes alternative elicitation methods, which impose an intertemporal status quo, to highlight these utility effects. Subadditivity is stronger when delaying an early gain than for hastening a later gain. The reverse pattern holds for losses; discounting is more subadditive when hastening a later loss than for delaying an earlier loss.
McAlvanah, Patrick. (2009). "Are People More Risk-Taking in the Presence of the Opposite Sex?" Journal of Economic Psychology, Volume 30, Issue 2, April 2009, 136-146.
Abstract: This paper investigates whether exposure to the opposite sex induces greater risk-taking in both males and females. Experimental subjects evaluated a series of hypothetical monetary gambles before and after viewing pictures of opposite sex faces; control subjects viewed pictures of cars. Both males and females viewing opposite sex photos displayed a significant increase in risk tolerance, whereas the control subjects exhibited no significant change. Surprisingly, the attractiveness of the photo had no effect; subjects viewing photographs of attractive opposite sex persons displayed similar results as those viewing photographs of unattractive people.
Media: You're Not as Tolerant for Risk as You Think