Priorities and prospect theory

Most would agree that priority setting is necessary to avoid a financial collapse in the health sector. It is much harder to find criteria how to do it. Discussions lead straight to the principles of decision making. But since all theories depend on assumptions given to make them work, debates on the assumption side are open for any kind of critic. This might be a reason hyprefernce-based methods for evaluations of different health states are not as common and popular as they could be. Indeed, it can be shown that results derived by such methods are severly biased by phenomenons which are summarized in a so-called Prospect Theory. These biases are quite obvious if one compares data of affected and unaffected people. But this theory offers, as well, a way to get results more accurate. -- Man ist sich weitgehend einig, dass eine Priorisierung im Gesundheitswesen notwendig ist, will man eine Finanzierungskrise verhindern. Die Kriterien dafür festzulegen, ist bedeutend schwieriger. Diskussionen kreisen immer wieder um die grundlegenden Annahmen, wie Entscheidungen getroffen werden. Da man gezwungen ist, Verhaltensaxiome festzulegen, sind darauf aufbauende, präferenz-basierte Methoden zur Evaluation von Gesundheitszuständen nicht so weit verbreitet, wie es denkbar wäre. Tatsächlich lässt sich zeigen, dass derart erzielte Ergebnisse verzerrt sind durch Phänomene, die von Kahneman und Tversky 1979 in der sogenannten Prospect Theory zusammengefasst wurden. Diese Verzerrungen werden deutlich im Vergleich von Evaluationen betroffener und nicht-betroffener Personen. Auf der anderen Seite bietet diese Theorie die Möglichkeit, Ergebnisse entsprechend zu korrigieren.

Utility functions for life years and health status: An additional remark

Utility-based measures for health-related quality of life gain more and more importance in cost-effectiveness analysis. The axiomatic foundation qualifies them as decision weights in use of the QALY concept. But their use is strained for they are loaded with assumptions to make them work. Pliskin et al. (1980) have impressively shown which assumptions might be reasonable to combine quality of life with length of life, those attributes fundamental to the QALY concept. One of those assumptions is the so called constant proportional tradeoff. It states that people will always sacrifice the same proportion of remaining life years in order to gain better health. This assumption restricts the underlying utility functions for life years to those consistent with constant proportional risk posture, i.e. power, logarithmic and linear function. However, these types of function might be too restrictive for they do not reflect constant absolut tradeoff. That means people might rather exchange the same number of life years for better health, independent of remaining life expectancy. Pliskin et al. mentioned that case already and suggested the exponential function as a propper function to reflect the underlying constant absolut risk posture. I will deliver its proof. In addition, a survey among Tinnitus patients is mentioned that could further stress the validity of those functions. -- Nutzen-basierte Maße für gesundheitsbezogene Lebensqualität gewinnen für Kosten-Effektivitäts-Analysen immer mehr an Bedeutung. Ihre axiomatische Fundierung qualifiziert sie im Gebrauch des QALY Konzeptes. Aber die Nutzung ist problematisch, da sie von verschiedenen Annahmen abhängt. Pliskin et al. (1980) haben gezeigt, welche Annahmen plausibel sind, Lebensqualität mit Lebenslänge zu kombinieren, jenen Attributen, die grundlegend für das QALY Konzept sind. Eine ist die sogenannte konstante proportionale Austausch Annahme. Sie besagt, dass Menschen immer eine proportionale Anzahl an Lebensjahre für bessere Gesundheit opfern würden. Diese Annahme beschränkt die zugrunde liegenden Nutzenfunktionen für Lebensjahre auf solche, die mit konstanter proportionaler Risikoeinstellung übereinstimmen, dass heisst Potenz- and Logarithmusfunktion oder eine lineare Funktion. Dennoch könnten diese Funktionstypen zu restriktiv sein, da sie nicht konstanten absoluten Austausch darstellen können. Damit ist gemeint, dass Menschen eventuell immer dieselbe Anzahl von Lebensjahren aufgeben, unabhängig ihrer verbleibenden Lebenserwartung. Pliskin et al. erwähnten diesen Fall bereits und schlugen die Exponentialfunktion als geeigneten Funktionstyp vor, die zugrunde liegende konstante absolute Risikoeinstellung wiederzugeben. Ich werde den Beweis liefern. Eine Befragung unter Tinnitus Patienten könnte darüber hinaus die Gültigkeit dieser Funktionen unter Beweis stellen.

Utility functions for life years and health status: An additional remark

Utility-based measures for health-related quality of life gain more and more importance in cost-effectiveness analysis. The axiomatic foundation qualifies them as decision weights in use of the QALY concept. But their use is strained for they are loaded with assumptions to make them work. Pliskin et al. (1980) have impressively shown which assumptions might be reasonable to combine quality of life with length of life, those attributes fundamental to the QALY concept. One of those assumptions is the so called "constant proportional tradeoff". It states that people will always sacrifice the same proportion of remaining life years in order to gain better health. This assumption restricts the underlying utility functions for life years to those consistent with constant proportional risk posture, i.e. power, logarithmic and linear function. However, these types of function might be too restrictive for they do not reflect "constant absolut tradeoff". That means people might rather exchange the same number of life years for better health, independent of remaining life expectancy. Pliskin et al. mentioned that case already and suggested the exponential function as a propper function to reflect the underlying constant absolut risk posture. I will deliver its proof. In addition, a survey among Tinnitus patients is mentioned that could further stress the validity of those functions.Nutzen-basierte Maße für gesundheitsbezogene Lebensqualität gewinnen für Kosten-Effektivitäts-Analysen immer mehr an Bedeutung. Ihre axiomatische Fundierung qualifiziert sie im Gebrauch des QALY Konzeptes. Aber die Nutzung ist problematisch, da sie von verschiedenen Annahmen abhängt. Pliskin et al. (1980) haben gezeigt, welche Annahmen plausibel sind, Lebensqualität mit Lebenslänge zu kombinieren, jenen Attributen, die grundlegend für das QALY Konzept sind. Eine ist die sogenannte "konstante proportionale Austausch" Annahme. Sie besagt, dass Menschen immer eine proportionale Anzahl an Lebensjahre für bessere Gesundheit opfern würden. Diese Annahme beschränkt die zugrunde liegenden Nutzenfunktionen für Lebensjahre auf solche, die mit konstanter proportionaler Risikoeinstellung übereinstimmen, dass heisst Potenz- and Logarithmusfunktion oder eine lineare Funktion. Dennoch könnten diese Funktionstypen zu restriktiv sein, da sie nicht "konstanten absoluten Austausch" darstellen können. Damit ist gemeint, dass Menschen eventuell immer dieselbe Anzahl von Lebensjahren aufgeben, unabhängig ihrer verbleibenden Lebenserwartung. Pliskin et al. erwähnten diesen Fall bereits und schlugen die Exponentialfunktion als geeigneten Funktionstyp vor, die zugrunde liegende konstante absolute Risikoeinstellung wiederzugeben. Ich werde den Beweis liefern. Eine Befragung unter Tinnitus Patienten könnte darüber hinaus die Gültigkeit dieser Funktionen unter Beweis stellen

Priorities and prospect theory

Most would agree that priority setting is necessary to avoid a financial collapse in the health sector. It is much harder to find criteria how to do it. Discussions lead straight to the principles of decision making. But since all theories depend on assumptions given to make them work, debates on the assumption side are open for any kind of critic. This might be a reason hyprefernce-based methods for evaluations of different health states are not as common and popular as they could be. Indeed, it can be shown that results derived by such methods are severly biased by phenomenons which are summarized in a so-called "Prospect Theory". These biases are quite obvious if one compares data of affected and unaffected people. But this theory offers, as well, a way to get results more accurate.Man ist sich weitgehend einig, dass eine Priorisierung im Gesundheitswesen notwendig ist, will man eine Finanzierungskrise verhindern. Die Kriterien dafür festzulegen, ist bedeutend schwieriger. Diskussionen kreisen immer wieder um die grundlegenden Annahmen, wie Entscheidungen getroffen werden. Da man gezwungen ist, Verhaltensaxiome festzulegen, sind darauf aufbauende, präferenz-basierte Methoden zur Evaluation von Gesundheitszuständen nicht so weit verbreitet, wie es denkbar wäre. Tatsächlich lässt sich zeigen, dass derart erzielte Ergebnisse verzerrt sind durch Phänomene, die von Kahneman und Tversky 1979 in der sogenannten "Prospect Theory" zusammengefasst wurden. Diese Verzerrungen werden deutlich im Vergleich von Evaluationen betroffener und nicht-betroffener Personen. Auf der anderen Seite bietet diese Theorie die Möglichkeit, Ergebnisse entsprechend zu korrigieren

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy.Regional growth; Agglomeration; Markov chains

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy. --Regional growth,agglomeration,Markov chains

Regional disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. One of the “stylised facts” from the empirical literature is that the process of absolute convergence observed for decades has slowed down or even petered out during the 1980s. In this paper we analyse whether it has resumed and persisted in the 1990s when European integration made huge steps forward. We construct a typology of regions in order to examine whether there are overlapping trends of regional development, in particular, overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Both of our approaches, Marcov chain analysis and dynamic panel estimation, provide evidence that regional convergence in the EU15 has become stronger in the 1990s. At the same time there appears to exist a tendency towards further agglomeration of high income economic activities. Keywords: Regional growth, agglomeration, dynamic panel estimation

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy

Regional disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. One of the “stylised facts” from the empirical literature is that the process of absolute convergence observed for decades has slowed down or even petered out during the 1980s. In this paper we analyse whether it has resumed and persisted in the 1990s when European integration made huge steps forward. We construct a typology of regions in order to examine whether there are overlapping trends of regional development, in particular, overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Both of our approaches, Marcov chain analysis and dynamic panel estimation, provide evidence that regional convergence in the EU15 has become stronger in the 1990s. At the same time there appears to exist a tendency towards further agglomeration of high income economic activities. Keywords: Regional growth, agglomeration, dynamic panel estimatio