title: New findings from the time trade-off for income approach to elicit willingness to pay for a quality adjusted life year.
abstract: In this paper we empirically investigate how to appropriately model utility of wealth and health. We use a recently proposed alternative approach to value willingness to pay (WTP) for health, making use of trade-offs between income and life years or quality of life, which we extend to allow for a more realistic multiplicative utility function over health and money. Moreover, we show how reference-dependency can be incorporated into this model and derive its predictions for WTP elicitation. We propose three experimental elicitation procedures and test these in a feasibility study, analysing the responses under different assumptions about the discount rate. Several interesting results are reported: 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.
authors.affiliation: iBMG, Erasmus University, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands. attema@bmg.eur.nl.
authors.forename: Arthur E
authors.initials: AE
authors.lastname: Attema
authors.affiliation: iBMG, Erasmus University, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands.|Merck B.V., Tupolevlaan 41-61, 1119 NW, Schiphol-Rijk, The Netherlands.
authors.forename: Marieke
authors.initials: M
authors.lastname: Krol
authors.affiliation: iBMG, Erasmus University, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands.
authors.forename: Job
authors.initials: J
authors.lastname: van Exel
authors.affiliation: iBMG, Erasmus University, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands.
authors.forename: Werner B F
authors.initials: WBF
authors.lastname: Brouwer
mesh_terms: D000293:Adolescent; D000328:Adult; D000368:Aged; D003695:Delivery of Health Care / Q000191:economics*; D005260:Female; D005382:Financing, Personal; D006801:Humans; D007182:Income; D008297:Male; D008875:Middle Aged; D011788:Quality of Life; D019057:Quality-Adjusted Life Years; D055815:Young Adult
keywords: Loss aversion; QALY; Time trade-off method; Utility of health and wealth; Willingness to pay