Testing the Predictive Validity of the Time Trade-Off and the Standard Gamble

Jose-Maria Abellan-Perpiñan (), Han Bleichrodt and Jose-Luis Pinto-Prades

No 07.17, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: This paper tests the consistency of health utility measurements with individual preferences. We compare three methods, the time trade-off, the standard gamble and a version of the standard gamble that corrects for the deviations from expected utility modeled by prospect theory. Individual preferences are measured both through a ranking task and through a choice task. In decisions involving no risk the time trade-off is most consistent with people’s preferences with the standard gamble a close second. In decisions involving risk the corrected standard gamble is most consistent with people’s preferences. Our data do not support the common assumption in health economics that utility is transferable across decision contexts.

Keywords: Health utility measurement; QALYs; standard gamble; time trade-off; prospect theory. (search for similar items in EconPapers)
JEL-codes: I10 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-12
New Economics Papers: this item is included in nep-upt
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Citations: View citations in EconPapers (3)

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http://www.upo.es/serv/bib/wps/econ0717.pdf First version, 2007 (application/pdf)

Related works:
Working Paper: Testing the predective validity of the time trade-off and the Stardard Gamble (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:07.17

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