Quality adjusted life years as expected utilities

Jose-Maria Abellan-Perpiñan () and José Luis PintoPrades ()
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José Luis PintoPrades: Department of Applied Economics, University of Murcia, Campus of Espinosa, E-30100 Murcia, Spain Department of Economics and Center for Health Economics, Pompeu Fabra University, Ramón Trias Fargas 25-27, E-Barcelona, Spain

Spanish Economic Review, 2000, vol. 2, issue 1, pages 49-63

Abstract: This article is intended to systematicaly show all the conditions that the Quality Adjusted Life Year (QALY) must satisfy so that it can be interpreted as a von Newman-Morgenstern utility. Such conditions cover two cases. When health states are chronic, we shall be referring to the conditions inferred by Pliskin, Shepard and Weinstein (1980). Likewise, we will devote our attention to commenting on the characterization of Bleichrodt (1996), pointing out that its condition 0 is a bit artificial. In turn, for temporary health states, we will remark that the characterization of Bleichrodt (1995) appears to be incomplete. We shall provide a complete derivation of QALYs. In this way, QALYs can be derived from an individual's preference relation that satisfies the von Newman-Morgenstern axioms by imposing additive independence, absence of contradictory trade-offs and partial symmetry. Moreover, the two last conditions conditions can be replaced by a single condition that we call general symmetry.

Keywords: Preferences for health; quality-adjusted life years; utility theory (search for similar items in EconPapers)
JEL-codes: D8 D99 I1 (search for similar items in EconPapers)
Date: 2000-04-25

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