This project examines the role that hyperbolic discounting plays as a determinant of unhealthy

birth outcomes. If pregnant women discount hyperbolically, a reduction in personal delivery costs (via public insurance) will exacerbate the disparity between each woman's short- and long-run rates of time preference, leading to greater engagement in unhealthy behaviors with long-run impacts. This disparity in rates of time preference will also make it more costly for women to maintain traditional commitment mechanisms designed to keep them on their optimal path to achieving a healthy birth outcome.

THEORETICAL FRAMEWORK

Assume there exists a time t* (less than T) during pregnancy at which a woman is indifferent between two

choices with different rewards: (a) engaging frequently in risky behavior(s) and experiencing a premature and/or low birth weight (LBW) baby at time T (denoted by C) and (b) engaging minimally in risky behavior(s) and not experiencing a premature and/or LBW baby at time T0 (denoted by C0), where T less than T0. We assume that C0 has the greater payoff and that p(t) (p0(t)) is the probability density of a birth before T (T0). Furthermore, we assume that C0 has both a non-zero probability of a premature and a late birth, and that T and T0 are the anticipated birth dates.

When there is greater time to birth, I hypothesize the woman exhibits patience to obtain the reward of a healthy birth outcome (C0). However, as the time to birth grows shorter and shorter, she becomes increasingly impatient and seeks instant gratification via any number of risky behaviors. My research question is the following: To what extent, if at all, does hyperbolic discounting occur in pregnancy?

I assume that p(v; t) is the probability density that C is realized at time v greater than t such that p(t; t) greater than p0(t; t) for t less than T with the assumption that if the density of premature birth at time v drops off monotonically as we move away from the anticipated realization time (T or T0), then the inequality seems reasonable as the density should have dropped off less at t for C than for C0. Since progression of pregnancy up to 39 weeks reduces the expected payoff from C (due to the reduced probability of having a premature birth), it follows that C p(t; t) less than C0 p0(t; t) for t less than T. Given these previous assumptions, we can then show that up to a certain point t* (say, the beginning of the third trimester of pregnancy), a woman might have engaged in protective behaviors such as quitting smoking and drinking alcohol upon learning she was pregnant only to return to those behaviors later in the pregnancy (sometime after t* ) given their addictive nature

(see Dasgupta and Maskin [1] for the proof of this).

EMPIRICAL FRAMEWORK

The dependent variables will include number of times per day smoked, number of glasses of wine / beer

drank per day, illicit drug use, folic acid use, coffee consumption, amount of exercising, desire to lose weight, and mental status (i.e., depression, anxiety, etc.). Independent variables will include Knowledge from medical professional of the negatives and positives of certain health behaviors, External Environmental variables (previous abortion, spouse smokes, work exposure to smoke, dieting/desire to lose weight, etc.), Previous Health issues (mother was low-birth weight herself and/or mother smoked during her pregnancy, family illnesses), and Demographics (race, age, income, education, etc.). I use the trimester time (i.e., given by 8 weeks, 18 weeks, and 32 weeks) and mother's pre-pregnancy BMI as stratification variables. Thus one empirical specification would be the following:

smoke_ij = B_1 + B_2 * K + B_3 * EE + B_4 * PH + B_5 * D + e_i,

where i = 1, 2, or 3 is the trimester indicator and j = 1, 2, 3, or 4 is the BMI category. The hypothesis of interest is that knowledge of the effects of smoking will have less of an impact on a woman's actual behavior as she grows impatient by the third trimester, her external environment will inuence her to smoke more, and previous health issues will not be as significant in avoiding smoking behavior by the third trimester. This specification would extend analogously to the other behaviors mentioned.