A QALY loss is a QALY loss is a QALY loss: a note on independence of loss aversion from health states
Stefan A. Lipman (),
Werner Brouwer () and
Additional contact information
Stefan A. Lipman: Erasmus University
The European Journal of Health Economics, 2019, vol. 20, issue 3, 419-426
Abstract Evidence has accumulated documenting loss aversion for monetary and, recently, for health outcomes—meaning that, generally, losses carry more weight than equally sized gains. In the conventional Quality-Adjusted Life Year (QALY) models, which comprise utility for quality and length of life, loss aversion is not taken into account. When measuring elements of the QALY model, commonly, the (implicit) assumption is that utility for length and quality of life are independent. First attempts to quantify loss aversion for QALYs typically measured loss aversion in the context of life duration, keeping quality of life constant (or vice versa). However, given that QALYs are multi-attribute utilities, it may be possible that the degree of loss aversion is dependent on, or inseparable from, quality of life and non-constant. We test this assumption using non-parametric methodology to quantify loss aversion, under different levels of quality of life. We measure utility of life duration for four health states within subjects, and present the results of a robustness test of loss aversion within the QALY model. We find loss aversion coefficients to be stable at the aggregate level, albeit with considerable heterogeneity at the individual level. Implications for applied work on prospect theory within health economics are discussed.
Keywords: Loss aversion; Prospect theory; QALY; Utility of life duration; Quality of life; Robustness (search for similar items in EconPapers)
JEL-codes: B41 D03 D81 I10 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10198-018-1008-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:eujhec:v:20:y:2019:i:3:d:10.1007_s10198-018-1008-9
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10198/PS2
Access Statistics for this article
The European Journal of Health Economics is currently edited by J.-M.G.v.d. Schulenburg
More articles in The European Journal of Health Economics from Springer, Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().