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University of Macedonia

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Title: Leveraging probability distortion to target prevention? A lottery experiment on cardiovascular risk (Authors: Joseph Capuno, Aleli Kraft, Jenny Kudymowa & Owen O’Donnell)

Abstract: Targeting is critical to cost-effective disease prevention. We use a randomized experiment in the Philippines to test whether a lottery incentive for a medical check-up succeeds in targeting those who would otherwise underinvest in prevention of cardiovascular disease because they distort probabilities. In theory, a lottery is more appealing to those who display inverse S-shaped probability distortion – a bias that discourages prevention of intermediate risks. We find that probability distortion is associated with underprevention at baseline. However, contrary to theory, the lottery is not particularly effective in targeting those inclined to distort probabilities.

Bio: Owen O’Donnell is Professor of Applied Economics in the School of Economics and the School of Health Policy & Management at Erasmus University Rotterdam. He is a Research Fellow of the Tinbergen Institute and a Senior Researcher at the University of Lausanne. His field of interest is health economics, particularly health inequality, healthcare equity, disability insurance, health insurance and prevention. He has published in the Journal of Public Economics, Journal of Human Resources, Journal of Health Economics, Journal of Development Economics and Demography, among others. He is an Editor of the Journal of Health Economics and an Associate Editor of Health Economics.