This paper uses data on real and perceived cancer risks and cancer screening behavior to test the allocative efficiency theory. Specifically, it explores whether the educated make better-informed health decisions. I propose that (1) when educated individuals are better informed, they are more likely to incorporate variation in risk factors when they report their personal cancer risk, and (2) as risk varies, the better educated will react more strongly by adopting preventive behaviors such as cancer screening. The results support for both predictions. Further, using data on attitudes toward breast health, I explore a possible mechanism: educated women are more receptive to scientific evidence and hold fewer nonscientific beliefs.
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