On ordinal utility, cardinal utility, and random utility

Though the Random Utility Model (RUM) was conceived  entirely in terms of ordinal utility, the apparatus throughwhich it is widely practised exhibits properties of  cardinal utility.  The adoption of cardinal utility as a  working operation of ordinal is perfectly valid, provided  interpretations drawn from that operation remain faithful  to ordinal utility.  The paper considers whether the latterrequirement holds true for several measurements commonly  derived from RUM.  In particular it is found that  measurements of consumer surplus change may depart from  ordinal utility, and exploit the cardinality inherent in  the practical apparatus.

Eliciting preferences of persons with dementia and informal caregivers to support ageing in place in the Netherlands:a protocol for a discrete choice experiment

Introduction:Ageing in place (AIP) for persons with dementia is encouraged by European governments and societies. Healthcare packages may need reassessment to account for the preferences of care funders, patients and informal caregivers. By providing insight into people's preferences, discrete choice experiments (DCEs) can help develop consensus between stakeholders. This protocol paper outlines the development of a Dutch national study to cocreate a healthcare package design methodology built on DCEs that is person-centred and helps support informal caregivers and persons with dementia to AIP. A subpopulation analysis of persons with dementia with a migration background is planned due to their high risk for dementia and under-representation in research and care. Methods and analysis:The DCE is designed to understand how persons with dementia and informal caregivers choose between different healthcare packages. Qualitative methods are used to identify and prioritise important care components for persons with dementia to AIP. This will provide a list of care components that will be included in the DCE, to quantify the care needs and preferences of persons with dementia and informal caregivers. The DCE will identify individual and joint preferences to AIP. The relative importance of each attribute will be calculated. The DCE data will be analysed with the use of a random parameters logit model. Ethics and dissemination:Ethics approval was waived by the Amsterdam University Medical Center (W23_112 #23.137). A study summary will be available on the websites of Alzheimer Nederland, Pharos and Amsterdam Public Health institute. Results are expected to be presented at (inter)national conferences, peer-reviewed papers will be submitted, and a dissemination meeting will be held to bring stakeholders together. The study results will help improve healthcare package design for all stakeholders.</p

Rescaling quality of life values from discrete choice experiments for use as QALYs: a cautionary tale

Background: Researchers are increasingly investigating the potential for ordinal tasks such as ranking and discrete choice experiments to estimate QALY health state values. However, the assumptions of random utility theory, which underpin the statistical models used to provide these estimates, have received insufficient attention. In particular, the assumptions made about the decisions between living states and the death state are not satisfied, at least for some people. Estimated values are likely to be incorrectly anchored with respect to death (zero) in such circumstances. Methods: Data from the Investigating Choice Experiments for the preferences of older people CAPability instrument (ICECAP) valuation exercise were analysed. The values (previously anchored to the worst possible state) were rescaled using an ordinal model proposed previously to estimate QALY-like values. Bootstrapping was conducted to vary artificially the proportion of people who conformed to the conventional random utility model underpinning the analyses. Results: Only 26% of respondents conformed unequivocally to the assumptions of conventional random utility theory. At least 14% of respondents unequivocally violated the assumptions. Varying the relative proportions of conforming respondents in sensitivity analyses led to large changes in the estimated QALY values, particularly for lower-valued states. As a result these values could be either positive (considered to be better than death) or negative (considered to be worse than death). Conclusion: Use of a statistical model such as conditional (multinomial) regression to anchor quality of life values from ordinal data to death is inappropriate in the presence of respondents who do not conform to the assumptions of conventional random utility theory. This is clearest when estimating values for that group of respondents observed in valuation samples who refuse to consider any living state to be worse than death: in such circumstances the model cannot be estimated. Only a valuation task requiring respondents to make choices in which both length and quality of life vary can produce estimates that properly reflect the preferences of all respondents

On Combining Stated Preferences and Revealed Preferences Approaches to Evaluate Environmental Resources Having a Recreational Use

This work aims at analysing the value of recreational water uses for the Idro Lake (Lombardy, Northern Italy), which has been experiencing dramatic fluctuations in its levels in recent years, due to excessive productive withdrawal that affected recreational uses. It estimates the economic benefits deriving from recreational uses, by considering the current recreational demand and the hypothetical one obtained by considering an “improved quality” scenario. Through an on-site survey, we built a panel dataset. Following Whitehead et al. (2000) and Hanley et al. (2003) we get welfare estimates by combining SP and RP responses. The present CS is estimated in €134 per individual, whilst the increase in CS is estimated in €173 per individual. These figures can be confronted with the economic value of competitive uses and with the clean up costs, respectively, to infer some policy indications

The Warden Attitude: An investigation of the value of interaction with everyday wildlife

Using a discrete choice experiment, we elicit valuations of engagement with ‘everyday wildlife’ through feeding garden birds. We find that bird-feeding is primarily but not exclusively motivated by the direct consumption value of interaction with wildlife. The implicit valuations given to different species suggest that people prefer birds that have aesthetic appeal and that evoke human feelings of protectiveness. These findings suggest that people derive wellbeing by adopting a warden-like role towards ‘their’ wildlife. We test for external validity by conducting a hedonic analysis of sales of bird food. We discuss some policy implications of the existence of warden attitudes

Sustainable Forest Management Preferences of Interest Groups in Three Regions with Different Levels of Industrial Forestry: An Exploratory Attribute-Based Choice Experiment

The challenge of sustainable forest management is to integrate diverse and sometimes conflicting management objectives. In order to achieve this goal, we need a better understanding of the aspects influencing the preferences of diverse groups and how these groups make trade-offs between different attributes of SFM. We compare the SFM preferences of interest groups in regions with different forest use histories based on the reasoning that the condition of the forest reflects the forest use history of the area. The condition of the forest also shapes an individual’s forest values and attitudes. These held values and attitudes are thought to influence SFM preferences. We tested whether the SFM preferences vary amongst the different interest groups within and across regions. We collected data from 252 persons using a choice experiment approach, where participants chose multiple times among different options described by a combination of attributes that are assigned different levels. The novelty of our approach was the use of choice experiments in the assessment of regional preference differences. Given the complexity of interregional comparison and the small sample size, this was an exploratory study based on a purposive rather than random sample. Nevertheless, our results suggest that the aggregation of preferences of all individuals within a region does not reveal all information necessary for forest management planning since opposing viewpoints could cancel each other out and lead to an interpretation that does not reflect possibly polarised views. Although based on a small\ud sample size, the preferences of interest groups within a region are generally statistically significantly different from each other; however preferences of interest groups across regions are also significantly different. This illustrates the potential importance of assessing heterogeneity by region and by group

Patients' and urologists' preferences for prostate cancer treatment: A discrete choice experiment

__Abstract__ Background: Patients' preferences are important for shared decision making. Therefore, we investigated patients' and urologists' preferences for treatment alternatives for early prostate cancer (PC). Methods: A discrete choice experiment was conducted among 150 patients who were waiting for their biopsy results, and 150 urologists. Regression analysis was used to determine patients' and urologists' stated preferences using scenarios based on PC treatment modality (radiotherapy, surgery, and active surveillance (AS)), and risks of urinary incontinence and erectile dysfunction.Results:The response rate was 110 out of 150 (73%) for patients and 50 out of 150 (33%) for urologists. Risk of urinary incontinence was an important determinant of both patients' and urologists' stated preferences for PC treatment (P<0.05). Treatment modality also influenced patients' stated preferences (P<0.05), whereas the risk of erectile dysfunction due to radiotherapy was mainly important to urologists (P<0.05). Both patients and urologists preferred AS to radical treatment, with the exception of patients with anxious/depressed feelings who preferred radical treatment to AS. Conclusion: Although patients and urologists generally may prefer similar treatments for PC, they showed different trade-offs between various specific treatment aspects. This implies that urologists need to be aware of potential differences compared with the patient's perspective on treatment decisions in shared decision making on PC treatment