Weight Loss Analysis based on Prospect Theory

Abstract

Scholars have recently discovered an interesting subject called reference point. It stresses the significance of people's expectations on their behavior. This concept has been widely discussed in the financial and labor markets. In this paper, we investigate the weight loss data from people who wanted to bet on themselves on the internet. Particularly, we are focusing on the situation where people are aiming to reach a relatively long-term goal without compulsion. By using a regression analysis on the weight loss data, we analyze how people react when they are above the reference points with considerations of other factors that may affect the weight loss result. Finally, the result supports the hypothesis well that the participants lose weight follow a zig-zag path, which indicates there is a reference baseline in their mental account to weigh gain and loss. It could help the government and business to design appropriate policy that can boost labor productivity and output. Therefore, some applications of this phenomenon have also been given for the labor market to increase employees’ productivity.