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Large numbers cause magnitude neglect: The case of government expenditures.

ABSTRACT: Four studies demonstrate that the public's understanding of government budgetary expenditures is hampered by difficulty in representing large numerical magnitudes. Despite orders of magnitude difference between millions and billions, study participants struggle with the budgetary magnitudes of government programs. When numerical values are rescaled as smaller magnitudes (in the thousands or lower), lay understanding improves, as indicated by greater sensitivity to numerical ratios and more accurate rank ordering of expenses. A robust benefit of numerical rescaling is demonstrated across a variety of experimental designs, including policy relevant choices and incentive-compatible accuracy measures. This improved sensitivity ultimately impacts funding choices and public perception of respective budgets, indicating the importance of numerical cognition for good citizenship.

SUBMITTER: Boyce-Jacino C

PROVIDER: S-EPMC9282355 | biostudies-literature | 2022 Jul

REPOSITORIES: biostudies-literature

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Large numbers cause magnitude neglect: The case of government expenditures.

Boyce-Jacino Christina C Peters Ellen E Galvani Alison P AP Chapman Gretchen B GB

Proceedings of the National Academy of Sciences of the United States of America 20220707 28

Four studies demonstrate that the public's understanding of government budgetary expenditures is hampered by difficulty in representing large numerical magnitudes. Despite orders of magnitude difference between millions and billions, study participants struggle with the budgetary magnitudes of government programs. When numerical values are rescaled as smaller magnitudes (in the thousands or lower), lay understanding improves, as indicated by greater sensitivity to numerical ratios and more accur ...[more]

PMID: 35867746

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Project description:ObjectiveTo examine the effect of the Medicare hospice benefit on Medicare and Medicaid expenditures by dual-eligible Medicare-Medicaid nursing home (NH) residents.Data sources/study settingSecondary data for NH residents for 1998-1999.Study designRetrospective cohort study of NH residents in the state of Florida who died between July and December 1999 (N=5,774). Medicare claims identified hospice enrollment, and Medicare and Medicaid claims identified expenditures by categories of care. Nursing home resident assessments were used to control for case-mix differences. Geocoding of nursing homes, hospice providers and hospitals was used to identify and characterize local health care markets.Data collection/extraction methodsA file was constructed linking Medicare and Medicaid claims to Minimum Data Set assessments of NH residents, and NH provider (Online Survey and Certification Automated Record) and hospice provider files.Principal findingsHospice enrollment results in substantial savings in government expenditures (22 percent) among all short-stay (< or =90 days) dying NH residents. For long-stay (>90 days) dying NH residents, hospice provides some savings (8 percent) among cancer residents while it is cost-neutral among dementia residents and adds some cost (10 percent) for residents with a diagnosis other than cancer or dementia. There is evidence of selection bias, particularly among residents with cancer (19 percent savings unadjusted versus 8 percent adjusted). Among short-stay NH residents, hospice greatly reduces Medicare expenditures but increases Medicaid expenditures.ConclusionsHospice enrollment results in lower combined Medicare/Medicaid expenditures in the last month of life, particularly among short-stay NH residents. This effect, however, varies by diagnosis and NH length of stay. In addition, for short-stay NH residents, current payment policy creates a Medicare incentive and Medicaid disincentive for promoting residents' referral to hospice.

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Large numbers cause magnitude neglect: The case of government expenditures.

Publications

Large numbers cause magnitude neglect: The case of government expenditures.

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