New findings from the TTO for income approach to elicit willingness to pay for a QALY
Job van Exel () and
Werner Brouwer ()
MPRA Paper from University Library of Munich, Germany
Willingness to pay (WTP) elicitations suffer from various methodological problems. This paper tests a recently proposed alternative approach to value WTP for health, making use of trade-offs between income and lifetime or quality of life. We apply three experimental elicitation procedures and analyze the responses under an additive and a multiplicative utility function over health and income. We report several interesting results. First, the data are highly skewed, but if we trim the 5% lowest and highest values, we obtain plausible WTP estimates. Second, the results differ considerably between procedures, indicating that WTP estimates are sensitive to the assumed utility function. Third, respondents appear to be loss averse for both health and money, which is consistent with assumptions from prospect theory. Finally, our results also indicate that respondents are more willing to trade quality of life than life years.
Keywords: loss aversion; time tradeoff method; QALY; utility of health and wealth; willingness to pay (search for similar items in EconPapers)
JEL-codes: B41 D03 I10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61197
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