Estimating sign-dependent societal preferences for quality of life

Arthur E. Attema (), Werner Brouwer, Olivier L’haridon () and Jose Luis Pinto
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Arthur E. Attema: Institute of Health Policy and Management - Erasmus University Rotterdam
Olivier L’haridon: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Jose Luis Pinto: Yunus Centre - GCU - Glasgow Caledonian University
Authors registered in the RePEc Author Service: Olivier L'Haridon

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Abstract: This paper is the first to apply prospect theory to societal health-related decision making. In particular, we allow for utility curvature, equity weighting, sign-dependence, and loss aversion in choices concerning quality of life of other people. We find substantial inequity aversion, both for gains and losses, which can be attributed to both diminishing marginal utility and differential weighting of better-off and worse-off. There are also clear framing effects, which violate expected utility. Moreover, we observe loss aversion, indicating that subjects give more weight to one group's loss than another group's gain of the same absolute magnitude. We also elicited some information on the effect of the age of the studied group. The amount of inequity aversion is to some extent influenced by the age of the considered patients. In particular, more inequity aversion is observed for gains of older people than gains of younger people.

Keywords: Equity weighting; health-related social welfare function; loss aversion; prospect theory; QALYs (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01183561
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Citations: View citations in EconPapers (11)

Published in Journal of Health Economics, 2015, 43, pp.229-243. ⟨10.1016/j.jhealeco.2015.07.006⟩

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Related works:
Journal Article: Estimating sign-dependent societal preferences for quality of life (2015)
Working Paper: Estimating sign-dependent societal preferences for quality of life (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01183561

DOI: 10.1016/j.jhealeco.2015.07.006

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