Parents' perceptions of endogenous risks to their own and their children's health

Objectives. We examine parents’ perceptions of their own and their children’s risks of contracting heart disease later in life. Objectives are to assess: (1) whether parents hold reasonable perceptions about latent health risks faced by family members; (2) how parents’ risk perceptions are related to decisions affecting risk, and (3) whether decision-making is consistent with optimizing behavior by altruistic parents in the face of endogenous risks.

Background. Previous research has examined adults’ and teens’ perceptions of probability and the relationship between perceptions and economic decisions. But little is known about how parents perceive health risks faced by their children or how parents’ perceptions relate to economic decisions that affect children’s health. These issues matter because parents’ decisions interact with public policy to influence the health outcomes that children experience, and because children often are singled out for special attention in analysis of environmental and health policies.

Data and Methods. Data from a nationally representative survey include quantitative measures of parents’ perceptions of the probability of being diagnosed with coronary artery disease before age 70, for themselves and for their children. Information about epidemiologically identified risk factors was collected after parents made assessments of risk. Parents’ stated preferences for a hypothetical medical intervention that would reduce heart disease risks were obtained. 

A theoretical model provides a restriction on an altruistic, utility-maximizing parent’s marginal willingness to pay to reduce an endogenous health risk that she and her child face. The empirical analysis examines whether this restriction holds and whether parents’ perceptions of risk are predictably related to risk factors. Improved econometric procedures are used to control for well-known problems with stated preference data.

Results. Empirical results suggest that: (1) perceived risk is endogenous and predictably related to risk factors but on average overestimated; (2) mothers on average overestimate risk more than fathers; (3) parents are relatively optimistic about their children’s future health, and (4) parents make utility-maximizing decisions about heart disease risks.  

Policy Implications. Provision of simple risk information may be unlikely to change behavior or reduce heart disease risks. Policies aiming to provide children with an extra margin of health protection may be offset by changes in parents’ resource allocations. Valuing children’s health according to parental preferences may be warranted in policy analyses.