Abstract
One core assumption of standard economic theory is that an individual’s preferences are stable, irrespective of the method used to elicit them. This assumption may be violated if preference reversals are observed when comparing different methods to elicit people’s preferences. People may then prefer A over B using one method while preferring B over A using another. Such preference reversals pose a significant problem for theoretical and applied research. We used a sample of medical and economics students to investigate preference reversals in the health and financial domain when choosing patients/clients. We explored whether preference reversals are associated with domain-relevant training and tested whether using guided ‘choice list’ elicitation reduces reversals. Our findings suggest that preference reversals were more likely to occur for medical students, within the health domain, and for open-ended valuation questions. Familiarity with a domain reduced the likelihood of preference reversals in that domain. Although preference reversals occur less frequently within specialist domains, they remain a significant theoretical and practical problem. The use of clearer valuation procedures offers a promising approach to reduce preference reversals.
Highlights
The elicitation of preferences, i.e. finding out if one prefers A over B or vice versa, is central in economics and, relevant to many topics studied in health economics, such as health state valuations, multi-criterion decision analysis [8], patient preferences [55], and studies on physician behaviour [38]
When we sum preference reversals, we find that combined for all conditions, fewer reversals occurred in the financial domain than in health, economics students show fewer reversals than medical students and fewer reversals occur when choice lists are used compared to open valuation
This study investigated whether domain-relevant training, gathered through selecting into and exposure to education to become a physician or economist, and choice list elicitation procedures reduced the rate of preference reversal in decision making for others for both health and money
Summary
The elicitation of preferences, i.e. finding out if one prefers A over B or vice versa, is central in economics and, relevant to many topics studied in health economics, such as health state valuations, multi-criterion decision analysis [8], patient preferences [55], and studies on physician behaviour [38]. Imagine a person who, when given a direct choice, indicates that she prefers surgery over physiotherapy for a given condition Given this observation, we would, ceteris paribus, expect her to be willing to pay more (or at least not less) for surgery than for physiotherapy. We would, ceteris paribus, expect her to be willing to pay more (or at least not less) for surgery than for physiotherapy If this is the case, her preferences could be classified as consistent. Her willingness to pay for physiotherapy may turn out to be higher than that for surgery. This may be classified as inconsistent and constitutes a preference reversal.
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