Deriving time discounting correction factors for TTO tariffs

The Time Tradeoff (TTO) method is a popular method for valuing health state utilities and is frequently used in economic evaluations. However, this method produces utilities that are distorted by several biases. One important bias entails the failure to incorporate time discounting. This paper aims to measure time discounting for health outcomes in a sample representative for the general population. In particular, we estimate TTO scores alongside time discounting in order to derive a set of correction factors that can be employed to correct raw TTO scores for the downward bias caused by time discounting. We find substantial positive correction factors, which are increasing with the severity of the health state. Furthermore, higher discounting is found when using more severe health states in the discounting elicitation task. More research is needed to further develop discount rate elicitation procedures and test their validity, especially in general public samples. Moreover, future research should investigate the correction of TTO score for other biases as well, such as loss aversion, and to develop a criterion to test the external validity of TTO scores.Discounting; QALY model; Time Tradeoff; Utility Measurement

In search of a preferred preference elicitation method: A test of the internal consistency of choice and matching tasks

The numerous reports on preference reversals in preference elicitations pose a great challenge to empirical economics. Many studies have found that different procedures may generate substantially different preferences. However, little is known about whether one procedure is more susceptible to preference reversals than another. Therefore, taking the preference reversals as a robust behavioral pattern, guidelines are called for to provide directions regarding a preferred preference elicitation task. This paper puts forward a new test of the internal consistency of choice and matching tasks, based on “internal preference reversals”. We replicate the preference reversal phenomenon and find a significant higher consistency within choice tasks than within matching tasks.preference reversal; internal consistency; scale compatibility; loss aversion; choice; matching

De meting van maatschappelijke voorkeuren voor gezondheid(szorg) vanuit een gedragseconomisch perspectief

Het is wenselijk om de voorkeuren van mensen met betrekking tot de afruil tussen efficiëntie en rechtvaardigheid van gezondheidszorg (in termen van het gebruik van zorg) op een zuivere manier te meten. De beleidsmaker krijgt hierdoor de mogelijkheid om beslissingen te nemen die in het belang van de maatschappij zijn. Dit artikel demonstreert hoe inzichten uit de gedragseconomie kunnen worden gebruikt om maatschappelijke voorkeuren voor de verdeling van zorgmiddelen beter te kunnen meten. Een praktisch voorbeeld toont de relevantie van deze nieuwe inzichten voor de allocatie van schaarse middelen in de gezondheidszorg aan

De TTO-methode en correctie voor tijdsvoorkeur

Inleiding: De time tradeoff (TTO-) methode is een veelgebruikte methode voor het waarderen van gezondheidstoestanden (Dolan, 1997; Dolan e.a., 1996). In een TTO dienen individuen een afweging te maken tussen kwaliteit van leven en levensduur. Een typische TTO-procedure omvat een afweging tussen het leven in een bepaalde imperfecte gezondheidstoestand gedurende tien jaar en het leven in perfecte gezondheid gedurende een periode van minder dan tien jaar, waarna in beide gevallen dood volgt

Good things come to those who wait—Decreasing impatience for health gains and losses

Historically, time preferences are modelled by assuming constant discounting, which implies a constant level of impatience. The prevailing empirical finding, however, is decreasing impatience (DI), meaning that levels of impatience decrease over time. Theoretically, such changes in impatience are crucial to understand behavior and self-control problems. Very few methods exist to measure DI without being restricted to or confounded by certain assumptions about the discounting function or utility curve. One such measure is the recently introduced DI-index, which has been applied to both monetary and health outcomes. The DI-index quantifies the deviation from constant impatience and

Constantly Proving The Opposite? A test of CPTO using a broad time horizon and correcting for discounting

Purpose: An important assumption underlying the quality-adjusted life year (QALY) model is that people trade off life years against health in the same proportion irrespective of the number of remaining life years. This is known as the constant proportional trade-offs (CPTO) condition. Previous studies have produced mixed empirical evidence about the validity of CPTO. This paper is the first to test CPTO using the time trade-off (TTO) method for a broad time horizon. Methods: In a sample of 83 students, we use a choice based TTO protocol to elicit TTO scores for back pain, using ten different gauge durations ranging between 1 and 46 years. The TTO scores are corrected for discounting, which is elicited by means of the direct method. Results: We find average TTO scores varying between 0.72 and 0.81. Although the scores do not differ much for different durations in absolute terms, some differences are significant, rejecting CPTO, with and without correcting for discounting. No clear relationship between TTO scores and gauge duration is found. An anchoring and rounding heuristic to some extent explains our results. Conclusions: Our findings highlight the importance of elicitation methods and context dependencies in QALY measurement and warrant detailed investigation of their influence

Studies on Intertemporal Preferences with Applications to Health Economics

Economic benefits are often received at different points in time. There are numerous examples of economic applications where the outcomes occur at multiple points in time. Among these are the savings decisions of households, the environmental policies of countries, investment decisions of firms, health-related decisions of individuals, and educational activities of students. In the majority of these cases, future outcomes are valued lower than similar present outcomes, i.e. there is positive time preference. There are several reasons for this behavior. One reason is that the future is almost always surrounded by uncertainty, whilst outcomes received immediately or in the nearer future are more certain. This translates into the discounting of future outcomes. Second, utility is often concave in outcomes (diminishing marginal utility). This means that more units of a particular outcome give less additional utility the more one already possesses of that outcome or the more one has already consumed of it. A second cup of coffee, for example, often gives less utility than the first one. Because wealth is increasing over time due to economic growth, people have more possibilities to consume in the future than in the present. The utility of this extra consumption does, however, not increase proportionally with the increase of consumption, so that future outcomes give less utility than similar present outcomes