Prevention, Treatment, and Palliative Care: The Relative Value of Health Improvements under Alternative Evaluation Frameworks
James K. Hammitt
No 22-1339, TSE Working Papers from Toulouse School of Economics (TSE)
The social value of decreasing health risks can be evaluated using benefit-cost analysis (BCA), cost-effectiveness analysis (CEA), or a social-welfare function (SWF). These frameworks can produce different social preference rankings of interventions depending on how their health effects and costs are distributed in a population. This paper derives social values of marginal decreases in the probability of illness, its severity (decrease in health status), lethality (conditional mortality risk), and cost under BCA, CEA, and three benchmark SWFs: utilitarian, ex ante prioritarian, and ex post prioritarian. The sensitivity of the social values of improvements in health and decreases in cost to individual circumstances are diverse. In contrast, the conditions under which a decrease in risk, severity, or lethality is socially preferred to a decrease in another of these dimensions are identical for BCA, CEA, the utilitarian and ex ante prioritarian SWFs, but can differ for the ex post prioritarian SWF.
Keywords: prevention; treatment; morbidity; social-welfare function; benefit-cost analysis; value per statistical life (search for similar items in EconPapers)
JEL-codes: D61 D63 D81 I10 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:126999
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