When Risk Perception Gets in the Way: Probability Weighting and Underprevention.

Prevention efforts, such as quitting smoking, flu vaccination, and exercising, are of crucial importance in health policy, but people tend to undertake too few of them. The main reason is that most prevention efforts only reduce but do not completely eliminate the risk of poor health. This makes it harder for people to assess the benefits of prevention, because they tend to misperceive and transform probabilities. In "When Risk Perception Gets in the Way: Probability Weighting and Underprevention," Baillon et al. introduce psychological insights (probability weighting) in a model of optimal decision making and show that most people undertake too little prevention when the risk of poor health is between 10% and 80%. The paper discusses several policy measures to make people spend more on prevention. Personal decisions about health hazards are the main cause of impaired health and premature death. People smoke and eat too much, and they exercise too little. The lack of preventive efforts is surprising given their proven effectiveness. In the early 1960s, Arrow suggested that moral hazard might be a reason for underprevention, but this explanation was later challenged. In this paper, we show that underprevention might be caused by misperceived probabilities. We derive when and how probability weighting gets in the way of prevention by blurring its benefits. We use a general model of prevention, encompassing several special cases from the literature. We also show how perceived ambiguity makes the problem of underprevention even worse by amplifying the effect of probability weighting. [ABSTRACT FROM AUTHOR]