Umeå Economic Studies, Department of Economics, Umeå University
No 806:
Risk and Rationality - Effects of contextual risk and cognitive dissonance on (sexual) incentives
Andréa Mannberg ()
Abstract: The thesis consists of an introductory part and four
self-contained papers. Paper [I] theoretically analyzes how the level and
uncertainty of future prospects affect incentives to abstain from sexual
risk taking in the presence of HIV. The results suggest that, for
individuals with limited access to HIV treatment, uncertainty of future
health may be an important factor driving unsafe sex practices and support
the empirical finding of a weak link between sexual behavior, HIV
prevalence, and HIV knowledge in poor countries; therefore suggesting that
AIDS policy needs to be calibrated in order to fit within different social
contexts. Paper [II] empirically tests the hypothesis derived in paper [I]
on young adults in Cape Town, South Africa. In order to adequately measure
sexual risk taking we combine a wide range of variables measuring risky
sexual behavior such that the maximum information possible is extracted
from, and adequate weights are attached to, each measure. This approach
differs from studies that commonly use individual measures or arbitrary
aggregations. The findings indicate that expected income and health and
future uncertainty are significant determinants of current patterns of
sexual risk taking. However, the empirical results only provide limited
support to a link between expected health and sexual risk taking. Paper
[III] theoretically analyzes effects of affect and defensive denial on
incentives to engage in sexual risk taking related to HIV. The theoretical
approach incorporates ideas from psychology on decision-making processes
and risk evaluation, and ideas from economics on utility maximization. The
results of the theoretical analysis suggest that the effect of
rationalization of personal risk depends on the risk of being HIV positive.
Although rationalization causes excessive risk taking behavior for
individuals with a relatively low lifetime risk, it may prevent fatalism
among individuals whose lifetime risk of HIV is perceived as overwhelming.
Paper [IV] theoretically analyzes the role of identity conflict for the
evolution of female labor supply over time. The results suggest the fear of
becoming an outsider in society may have prevented a complete transition of
women from housewives to breadwinners. In addition, our analysis shows that
not recognizing that the weights attached to different social identities
are endogenous may imply that the long-run effects on labor supply of a
higher wage may be underestimated. Keywords: HIV/AIDS, Health risk,
Uncertainty, Risk aversion, Self-Control, Time-inconsiste.
Keywords: HIV/AIDS; Health risk; Uncertainty; Risk aversion; Self-Control; Time-inconsistency; Cognitive dissonance; Regret; Norms; Social identity; (follow links to similar papers)
JEL-Codes: D81; D84; D91; I10; I12; J21; J22; (follow links to similar papers)
248 pages, May 11, 2010
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