A test of prospect theory

Abstract

Objectives: Prospect theory (PT) hypothesizes that people judge states relative to a reference point, usually assumed to be their current health. States better than the reference point are valued on a concave portion of the utility function; worse states are valued on a convex portion. Using prospectively collected utility scores, the objective is to test empirically implications of PT. Methods: Osteoarthritis (OA) patients undergoing total hip arthroplasty periodically provided standard gamble scores for three OA hypothetical states describing mild, moderate, and severe OA as well as their subjectively defined current state (SDCS). Our hypothesis was that most patients improved between the pre- and postsurgery assessments. According to PT, scores for hypothetical states previously > SDCS but now < SDCS should be lower at the postsurgery assessment. Results: Fourteen patients met the criteria for testing the hypothesis. Predictions were confirmed for 0 patients; there was no change or mixed results for 6 patients (42.9 percent); and scores moved in the direction opposite to that predicted by PT for 8 patients (57.1 percent). Conclusions: In general, the direction and magnitude of the changes in hypothetical-state scores do not conform to the predictions of PT. Copyright © 2005 Cambridge University Press.