title: Modelling Nonlinearities and Reference Dependence in General Practitioners' Income Preferences.
abstract: This paper tests for the existence of nonlinearity and reference dependence in income preferences for general practitioners. Confirming the theory of reference dependent utility within the context of a discrete choice experiment, we find that losses loom larger than gains in income for Norwegian general practitioners, i.e. they value losses from their current income level around three times higher than the equivalent gains. Our results are validated by comparison with equivalent contingent valuation values for marginal willingness to pay and marginal willingness to accept compensation for changes in job characteristics. Physicians' income preferences determine the effectiveness of 'pay for performance' and other incentive schemes. Our results may explain the relative ineffectiveness of financial incentive schemes that rely on increasing physicians' incomes. Copyright © 2015 John Wiley & Sons, Ltd.
authors.affiliation: Department of Community Medicine, Faculty of Health Sciences, University of Tromsø, Tromsø, Norway.
authors.forename: Jon Helgheim
authors.initials: JH
authors.lastname: Holte
authors.affiliation: Department of Economics and Finance, La Trobe Business School, La Trobe University, Melbourne, Victoria, Australia.
authors.forename: Peter
authors.initials: P
authors.lastname: Sivey
authors.affiliation: Department of Community Medicine, Faculty of Health Sciences, University of Tromsø, Tromsø, Norway.
authors.forename: Birgit
authors.initials: B
authors.lastname: Abelsen
authors.affiliation: Department of Community Medicine, Faculty of Health Sciences, University of Tromsø, Tromsø, Norway.
authors.forename: Jan Abel
authors.initials: JA
authors.lastname: Olsen
mesh_terms: D002755:Choice Behavior; D003430:Cross-Sectional Studies; D058005:General Practitioners / Q000191:economics / Q000523:psychology / Q000706:statistics & numerical data*; D006801:Humans; D007182:Income / Q000706:statistics & numerical data*; D017711:Nonlinear Dynamics; D012052:Reimbursement, Incentive / Q000191:economics; D011795:Surveys and Questionnaires
keywords: contingent valuation; discrete choice experiments; general practitioners; income preferences; nonlinearity; reference dependence