deriving distributional weights for qalys through discrete choice experiments this paper presents the first attempt to use a discrete choice experiment to derive distributional weights for quality adjusted life years qalys based on characteristics age and severity of the beneficiaries a novel approach using the hicksian compensating variation is applied advantages include derivation of weights for qalys not just for life or life years saved and investigation of the impact of the size of the health gain by allowing the gain to be traded against other characteristics results suggest one would generally not weight qalys except in a small number of specific cases and in those cases the weights are relatively small methodological challenges are highlighted as is a future research agenda

sensitivity to scale in contingent valuation the importance of the budget constraint the possible insensitivity of willingness to pay wtp values to changes in scale continues to cause concern within the contingent valuation cv literature although several reasons for this phenomenon have been suggested empirical evidence both supports and refutes insensitivity this paper presents data that suggest that insensitivity may be significantly determined by the individual s budget constraint the higher the proportion of income the expressed wtp represents the greater the insensitivity of that wtp to changes in the scale of the good irrespective of changes in underlying marginal utility the methodological implication for cv studies in health care is outlined

delays and equilibria with large and small information in social learning abstract the general model of social learning with irreversible investment and endogenous timing is analyzed for any distribution of private informations strategic complementarities and multiple equilibria appear which are generated solely by information externalities different equilibria generate strikingly different amounts of information the impacts of various assumptions bounded beliefs large number of agents discrete time and short periods are examined carefully the properties are robust to the introduction of observation noise with a continuum of agents

economics health and health economics hyes healthy years equivalent versus qalys quality adjusted live year this paper responds to culyer and wagstaff s cw and buckingham s b arguments we refute their claim about the equivalence of hyes and qalys they fail to distinguish between choice under uncertainty and under certainty cw assume that all individuals have a specific form of utility function which yields their conclusion of equivalence b s arguments confuse the measurement technique and the utility theory from which it stems his argument about the normative superiority of the qaly construct is inconsistent with economic thinking the hye by being compatible with the principles of economics is superior to the qaly for economic evaluations of health care interventions

implications of basing health care resource allocations on cost utility analysis in the presence of externalities abstract cost utility analysis is increasingly being advocated as a tool for helping to establish funding priorities among programs and services in the health care sector as currently conducted however cost utility analysis is problematic as a basis for achieving allocative efficiency because it excludes externalities the exclusion of externalities may bias program ranking in unpredictable ways leading to a non optimal allocation of resources consideration of externalities also raises a number of distributional issues for the evaluation of health services and highlights the importance of developing economic evaluation methods that are consistent with the conceptual basis for allocating resources

time preference the discounted utility model and health the constant rate discounted utility model is commonly used to represent intertemporal preferences in health care program evaluations this paper examines the appropriateness of this model and argues that the model fails both normatively and descriptively as a representation of individual intertemporal preferences for health outcomes variable rate discounted utility models are more flexible but still require restrictive assumptions and may lead to dynamically inconsistent behaviour the paper concludes by considering two ways of incorporating individual intertemporal preferences in health care program evaluations that allow for complementarity of health outcomes in different time periods

alternative approaches to valuing intangible health losses the evidence for multiple sclerosis abstract this study uses both risk risk and risk dollar approaches to assess intangible health losses associated with multiple sclerosis ms using an estimation approach that adjusts for potential perceptional biases that may affect the expressed risk tradeoffs we estimated parameters of the utility function of persons with and without ms as well as the degree of subjects overestimation of the probability of obtaining ms the sample included subjects from the general population and persons with ms we found that marginal utility of income is lower in the state with ms than without it however the difference in marginal utility in the two states was greater for persons without ms than for those with the disease persons with ms overestimated the probability of acquiring ms to a greater extent than did persons within ms correcting for overestimation of this probability the value of intangible loss of a statistical case of ms derived from responses of the general population was us 350 000 to us 500 000 persons with ms were willing to pay somewhat more than this d80 i18 j17

eliciting preferences for collectively financed health programmes the willingness to assign approach improving public involvement in health system decision making stands as a primary health policy goal however still limited guidance is available on how best to elicit preferences for health care programmes this study examines a contingent choice technique to elicit preferences among health programmes and named willingness to assign wtas wtas reveals relative monetary based values of a set of competing public programmes under a hypothetical healthcare budget assessment experimental evidence is reported from a deliberative empirical study valuing ten health programmes in the context of the catalan health service evidence from this experimental study reveals that within the context of multiple programmes preferences are internally more consistent and slightly less affected by preference reversals as compared to values revealed from an adapted technique eliciting the willingness to pay wtp extra taxes another finding suggests that although programmes promoting health received the higher rel

investment dynamics with common and private values abstract we study a dynamic investment game with two dimensional signals where each firm observes its continuously distributed idiosyncratic cost of investment and a discrete signal correlated with common investment returns we demonstrate that the one step property holds and provide an equilibrium existence characterization result reversals are possible where a large number of firms investing in a given round becomes bad news about investment returns welfare is compared to static and rigid timing benchmarks and computed for large economies

pressure and the division of a public budget this paper considers the division of a public budget among competing interests the planner determines the optimal allocation by maximizing a weighted social welfare function these weights reflect society s attitudes to different recipient groups and are not constrained to be constant by exerting pressure the recipients can attempt to manipulate the weights and hence influence the division of the budget the amount of resources used on pressure and the effects on the preference weights are calculated an important parameter in the model is the elasticity of pressure for which an appropriate estimate is presented from the case of competition for a share of a health services budget in norway

applying conjoint analysis in economic evaluations an application to menorrhagia the increased demand for health care coupled with limited resources means that decisions have to be made concerning the allocation of scarce health care resources this paper considers how conjoint analysis ca can be used to aid this decision making process it is shown how the technique can be used to estimate marginal rates of substitution between attributes willingness to pay wtp if cost is included as an attribute and overall utility scores for different ways of providing a service the technique is applied to consider women s preferences for two surgical procedures in the treatment of menorrhagia hysterectomy and conservative surgery the results suggest conservative surgery is preferred to hysterectomy as indicated by higher utility scores for the former and a marginal wtp of 7593 to have conservative surgery rather than hysterectomy the internal validity of ca was also shown it is concluded that ca is a potentially useful instrument for policy makers however numerous methodological iss

a new approach to valuing a life abstract because the issue of how to put a monetary value on a life will always be controversial this paper presents an alternative approach that can in certain circumstances avoid the use of monetary values the alternative approach uses time as the numeraire this numeraire can handle both the ex ante and ex post approaches to valuing a life after showing how a simple two period consumer choice problem can be translated into terms of time the paper considers an application that involves reformulating the data used to evaluate the 55 mph speed limit decision in the united states

using rank data to estimate health state utility models in this paper we report the estimation of conditional logistic regression models for the health utilities index mark 2 and the sf 6d using ordinal preference data the results are compared to the conventional regression models estimated from standard gamble data and to the observed mean standard gamble health state valuations for both the hui2 and the sf 6d the models estimated using ordinal data are broadly comparable to the models estimated on standard gamble data and the predictive performance of these models is close to that of the standard gamble models our research indicates that ordinal data have the potential to provide useful insights into community health state preferences however important questions remain

a new axiomatic approach to the evaluation of population health in this paper we explore the implications of normative principles for the evaluation of population health we formalize those principles as axioms for social preferences over distributions of health for a given population we single out several focal population health evaluation functions which represent social preferences as a result of combinations of those axioms our results provide new rationale for popular theories in health economics such as the unweighted aggregation of quality adjusted life years qalys or healthy years equivalents hyes and generalizations of the two aimed to capture concerns for distributive justice without resorting to controversial assumptions on individual preferences

a conjoint analysis of corporate preferences for the sectoral crediting mechanism a case study of shanxi province in china it is crucial to understand corporate preferences in designing and planning new market based instruments using the method of conjoint analysis this paper evaluates corporate preferences for policy alternatives of the sectoral crediting mechanism aiming at supporting its discussions and development data were collected from 94 companies in all 11 prefecture level cities of shanxi province china the results confirm that companies are most concerned about three policy attributes domestic policy instruments the relationship with the clean developing mechanism and the principle of common but differentiated responsibilities from the viewpoint of the chinese businesses surveyed the ideal policy alternative has a domestic policy instrument in which installations with voluntary targets receive tradable units while co existing with the clean developing mechanism and providing opportunities to get financial and technical assistance from developed countries meanwhile the coverage of the sectoral crediting mechanism could be expanded to small companies that are the most inefficient and thus have the lowest abatement costs in some sectors the results of this study are important in light of ongoing discussions and developments of the sectoral crediting mechanism in china

hypothetical versus real willingness to pay in the health care sector results from a field experiment abstract we conducted a field experiment comparing hypothetical and real purchase decisions for a pharmacist provided asthma management program among 172 subjects with asthma subjects received either a dichotomous choice contingent valuation question or were given the opportunity to actually enroll in the program three different prices were used us 15 40 and 80 in the hypothetical group 38 of subjects said that they would purchase the good at the stated price but only 12 of subjects in the real group purchased the good p 0 000 we cannot however reject the null hypothesis that definitely sure hypothetical yes responses as identified in a follow up question correspond to real yes responses we conclude that the dichotomous choice contingent valuation method overestimates willingness to pay but that it may be possible to correct for this overestimation by sorting out definitely sure yes responses

constructive consumer choice processes consumer decision making has been a focal interest in consumer research and consideration of current marketplace trends e g technological change an information explosion indicates that this topic will continue to be critically important we argue that consumer choice is inherently constructive due to limited processing capacity consumers often do not have well defined existing preferences but construct them using a variety of strategies contingent on task demands after describing constructive choice consumer decision tasks and decision strategies we provide an integrative framework for understanding constructive choice review evidence for constructive consumer choice in light of that framework and identify knowledge gaps that suggest opportunities for additional research

health utility indices and equity considerations the aim of this paper is to propose methods that incorporate equity concerns into cost utility analysis the focus of the paper is on qalys but the results apply to health utility indices in general two interpretations of qalys are considered qalys as von neumann morgenstern utilities and qalys as measures of health a justification is provided for aggregating consistently scaled qalys as utilities over individuals the conditions underlying unweighted aggregation of qalys are identified these conditions exclude two common types of equity concern algorithms are proposed that take into account equity concerns and that are relatively easy to apply

needs based health care funding implications for resource distribution in ontario capitation models have been suggested as an alternative to funding methods based on historical utilization patterns capitation funding distributes esources to regions or programs according to their population adjusted for the age and gender composition and relative need the most commonly used relative needs measure is the standardized mortality ratio smr this paper compares the distribution of resources in ontario implied by a variety of capitation formula another aspect of this research is to design a mechanism that translates the smr into a funding allocation index we specify a non linear model to capture the relationship between current expenditures and the smr while controlling for historical utilization factors in contrast to previous work in which a linear relationship between expenditures and need was assumed our estimates suggest that the relationship may actually be highly non linear this non linearity ncreases transfers to regions of relative need relative to a linear capitation program jel classification i0 h51 on a suggere des modeles de financement per capita des soins de sante pour remplacer les methodes de financement fondees sur les patterns historiques d utilisation cette solution de rechange distribuerait les ressources aux regions et programmes selon la population avec des ajustements pour tenir compte de la structure ges de sexes et de besoins relatifs la mesure la plus commune des besoins relatifs est le taux de mortalite standardise tms ce memoire compare la repartition des ressources en ontario qui decoulerait de l emploi d une variete de formules on tente aussi de construire un mecanisme qui traduise le tms en un indice d allocation des fonds les auteurs construisent un odele non lineaire qui saisit la relation entre tms et epenses courantes tout en normalisant pour tenir compte des facteurs historiques d utilisation contrairement aux resultats des travaux anterieurs qui postulaient une relation lineaire entre epenses et besoins les resultats de cette etude uggerent que cette relation peut etre fortement non lineaire et que cette non linearite tend a ccroitre les transferts aux regions qui ont les besoins les plus grands

dynamic allocation of kidneys to candidates on the transplant waiting list the crux of the kidney allocation problem is the trade off between clinical efficiency and equity we consider a dynamic resource allocation problem with the tri criteria objective of maximizing the quality adjusted life expectancy of transplant candidates clinical efficiency and minimizing two measures of inequity a linear function of the likelihood of transplantation of the various types of patients and a quadratic function that quantifies the differences in mean waiting times across patient types the dynamic status of patients is modeled by a set of linear differential equations and an approximate analysis of the optimal control problem yields a dynamic index policy we construct a large scale simulation model using data from over 30 000 transplants and the simulation results demonstrate that relative to the organ allocation policy currently employed in the united states the dynamic index policy increases the quality adjusted life expectancy and reduces the mean waiting time until transplantation for all six demographic groups two sexes races and age groups under consideration

measurement of consumer patient preferences using a hybrid contingent valuation method this study introduces a hybrid two stage contingent valuation method applied to asthma treatment respondents are initially offered a choice between hypothetical medications implying a tradeoff between safety and efficacy stage two elicits willingness to pay wtp for an improvement along a single risk dimension estimates of the value of asthma control based on the initial risk tradeoff stage range from approximately us 1400 to us 2100 per year assuming a us 6 million value of life analysis of the second stage wtp responses yield estimates for the value of a statistical life of approximately us 9 million and for asthma control of approximately us 2200 per year

unraveling the academic productivity of economists the opportunity costs of teaching and service this study investigates the relationships among research productivity teaching and service on the basis of individual specific information involving approximately 715 academic economists responding to an online survey these economists provided information regarding their teaching and service commitments as well as personal and institutional information the publication record of each respondent was then obtained from econlit together these data constitute a rich field for the systematic study of research productivity results of a tobit analysis reveal much about the nature of research productivity underscoring for instance the importance of gender coauthorship presen tations at conferences and peers who publish among the more important findings from this analysis is that both teaching and service commitments have a significantly negative impact on the research productivity of academic economists these relations hold across types of academic employer though to varying degrees taken together the results provide interesting insights into the roles of academic scholars teachers and colleagues

reputational capital and academic pay geoffrey k turnbull i introduction economists continue to have a strong interest in academic labor markets as the steady stream of earnings studies over the past several decades readily attests the academic labor market draws the attention of economists not only because it is a topic of direct personal interest but also because it presents an opportunity to examine general theories of labor markets in a context with which the researcher has intimate experience nonetheless important questions about how the market values research teaching and service remain unanswered to what extent does the market reward quality versus quantity of published research or team production in the form of co authorship furthermore how durable is reputational capital for individuals whose research productivity diminishes during their career ultimately these questions relate in one way or another to the nature of the incentive structure faced by academic economists we provide new evidence concerning the role of research quality co authorship administrative service and teaching performance in the production of reputational capital in addition we explore the question of the durability of reputational capital once some of these activities cease we assume that the quantity and quality of published research largely determines an individual s reputational capital in the external market to help us sort out the separate effects on reputational capital of both the quality and quantity of research activity we measure research quality by both journal quality and career citations employing an interactive quantity quality term a related question concerns the role of team production in building an individual s reputational capital do individuals receive differential returns to publishing single authored versus co authored research papers this is an interesting question in light of the substantial increase in co authorship over the last few decades 1 one explanation of this trend is that the academic market has presented scholars with increasing opportunities for specialization in the production of knowledge and that team production involves the combination of complementary skilled researchers if team production reflects complementarities in the production of research we should observe little difference in the returns to single versus co authored work another explanation is that co authorship involves the combination of substitute skilled researchers so that co authorship presents a way for individuals to reduce their research efforts without reducing their individual measured research output to the extent that co authorshi p represents such substitution the market should fully discount the returns to multiple authored papers in this article we also move beyond identifying the factors that enhance an individual s reputation in the market to study the question of the durability of reputational capital some individuals quit publishing once they are tenured or promoted while others experience lengthy but temporary breaks in their flow of research output we examine the potential penalties associated with gaps in research output providing the first empirical evidence concerning the durability of reputational capital for academic economists in order to ensure that our analysis deals with these issues in a way that is most relevant to a large portion of the market for academic economists we use data from several research universities but restrict the sample frame to a single discipline economics much of the previous work estimating how publications or other factors affect academic salaries typically use data from a single university with earnings equations estimated across disciplines restricting the sample to a single discipline has the additional advantage of reducing potential heterogeneity problems associated with measuring productivity across disciplines in addition our data enable us more thoroughly to explore the empirical issues in the debate since they permit more precise measures of the past and current productivity of individuals engaged in comparable work

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

cost effectiveness utility analyses do current decision rules lead us to where we want to be despite the growing literature on economic evaluation of health care programmes little attention has been paid to the theoretical foundations of cost effectiveness and cost utility analyses and the validity of the decision rules adopted as methods of achieving the stated goals we show that although applications of the techniques can be used to pursue some managerial objectives in the context of highly constrained environments such applications are inconsistent with both welfare economic objectives and the interpretations of the findings of these applications alternative strategies are identified as potential and practical methods for pursuing welfare economic objectives

structural reliability of conjoint measurement in health care an empirical investigation this paper is concerned with the structural reliability of conjoint measurement when applied in a health care setting the clinical context was the diagnosis and treatment of knee injuries a conjoint measurement study was conducted which used the pairwise choice approach to preference elicitation each choice included two scenarios a conventional treatment approach to management arthroscopy and an approach using magnetic resonance imaging in order to test for structural reliability two separate conjoint measurement exercises were conducted exercise a where scenarios were defined in terms of three attributes and exercise b where scenarios included all four attributes the assessment of structural reliability involved a comparison of two random effects probit models for exercises a and b data were collected on a total of 176 students of sports science the results strongly indicate that the models for the two exercises are different although the instability is limited to the constant term and a sin

social learning and peer effects in consumption evidence from movie sales using box office data for all movies released between 1982 and 2000 i quantify how much the consumption decisions of individuals depend on information they receive from their peers when quality is ex ante uncertain in the presence of social learning we should see different box office sales dynamics depending on whether opening weekend demand is higher or lower than expected i use a unique feature of the movie industry to identify ex ante demand expectations the number of screens dedicated to a movie in its opening weekend reflects the sales expectations held by profit maximizing theatre owners several pieces of evidence are consistent with social learning first sales of movies with positive surprise and negative surprise in opening weekend demand diverge over time if a movie has better than expected appeal and therefore experiences larger than expected sales in week 1 consumers in week 2 update upward their expectations of quality further increasing week 2 sales second this divergence is small for movies for which consumers have strong priors and large for movies for which consumers have weak priors third the effect of a surprise is stronger for audiences with large social networks finally consumers do not respond to surprises in first week sales that are orthogonal to movie quality like weather shocks overall social learning appears to be an important determinant of sales in the movie industry accounting for 32 of sales for the typical movie with positive surprise this implies the existence of a large social multiplier such that the elasticity of aggregate demand to movie quality is larger than the elasticity of individual demand

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

equivalence scales and the costs of disability abstract the impact of disability on household welfare is estimated by equivalence scales using data from the 1986 1987 fes disability survey three methods of identifying scales from cross section data are considered these imply a series of restrictions that are tested on quadratic logarithmic engel curves the results indicate that there are substantial consumption costs associated with physical disability

equity considerations in utility based measures of health outcomes in economic appraisals an adjustment algorithm in this paper we consider whether methods currently used to measure utility of health outcomes are consistent with the equity criteria adopted by researchers we show that unless the chosen equity criterion is incorporated in the design of the measurement instrument the derived health state utilities are inconsistent with the equity criterion except under special circumstances adjustment algorithms are derived based on the axioms of von neumann morgenstern utility theory which take account of difference equity criteria currently adopted in the literature the proposed approach is based on simple lottery questions of the type already used widely in empirical studies

views of teaching and research in economics and other disciplines anecdotes are often quite suggestive a graduate student in economics who was serving as a teaching assistant once reported that his major professor came into his office and told him that he was spending too much of his time helping his undergraduate students and not enough time on his research was the professor expressing a preference for time spent on teaching over research or was the professor suggesting to the student that the academic market rewards research more than teaching regardless the underlying message that gets transferred from such an experience as early as graduate education and perhaps throughout a career is that teaching is not as important or valuable as research such strong conclusions however should not be based on anecdotal evidence whether economics professors are less interested in teaching and more interested in research is an empirical question worthy of study although teaching and research choices made by economics faculty members reflect both preferences and choice sets in this study we focus on preferences and use a national survey to compare the teaching and research views of economists with faculty members in other major disciplines

on the economic foundations of cea ladies and gentlemen take your positions abstract there are still many ongoing debates about several aspects of the methodology of economic evaluations of health care interventions some of the disparities in recommendations on methodological issues may be traced back to different viewpoints on cost effectiveness analysis cea in general two important views are the welfarist approach which aims at embedding cea into traditional welfare economics and the decision maker s approach which takes a broader and more pragmatic view on cea the focus in welfarism may be on utility while that of the decision maker s approach may be considered to be on health in this paper it is examined how these two views differ and how these differences may subsequently lead to debates in methodological areas it is indicated that embedding the practical operationalisation of cea in welfare economics seems impossible in a strict welfarist approach it is necessary to view qalys as being utilities although one may question whether such an approach to qalys is appropriate also equity considerations may play an important role in cost effectiveness analysis and these should preferably be taken into account in a way that reflects societal attitudes towards an equitable distribution of health care these equity considerations may not always be directly related to utility or efficiency furthermore both camps may prefer different methods for cost measurement in areas such as productivity costs and informal care a better recognition of the contents and origins of controversies and disputes may enhance the clarity of discussions

applications of cost benefit analysis to health care departures from welfare economic theory in applying the principles of cost benefit analysis to real world problems of resource allocation particular care must be taken to ensure that the welfare economic theory which underlies the cost benefit technique is adhered to major problems arise where costs and benefits are used interchangeably to represent the good and bad attributes of a programme furthermore in the presence of mutually exclusive projects focussing attention upon the net benefits or cost benefit ratios of individual projects as opposed to the net benefits of the use of budgeted resources can lead to biased estimates of the shadow price of projects and consequently errors in analysts conclusions as a result economic appraisals of individual projects are not directly relevant for choosing between mutually exclusive projects of different sizes both types of problem are illustrated by reference to both simple examples and published economic appraisals of health care techniques integer programming is proposed and demonstrated as a method of selecting between mutually exclusive projects

taking the road less traveled by does conversation eradicate pernicious cascades abstract we offer a model in which sequences of individuals often converge upon poor decisions and are prone to fads despite communication of the payoff outcomes from past choices this reflects both direct and indirect action based information externalities in contrast with previous cascades literature cascades here are spontaneously dislodged and in general have a probability less than one of lasting forever furthermore the ability of individuals to communicate can reduce average decision accuracy and welfare

qalys versus hyes this paper explores the claim that qalys are liable to misrepresent consumer preferences and hence lead to decision makers choosing options which are not those preferred by the public it also considers the claim that hyes do not suffer from this defect we argue that none of the examples offered to date demonstrate the alleged tendency of qalys to misrepresent preferences we also show that hyes are identical to qaly scores obtained from a time tradeoff experiment and therefore that the assumptions about preferences underlying hyes are just as restrictive as those underlying tto based qalys

sequencing and nesting in contingent valuation surveys abstract the term embedding is ill defined and has been applied to distinct phenomena some predicted by economic theory and others not this paper lays out a theoretical framework for looking at these phenomena and provides a set of well defined terms included is a discussion of survey design problems which may induce spurious evidence in favor of the hypothesis that respondents are insensitive to the scope of the good being valued an empirical example of the component sensitivity is provided this test rejects the hypothesis that respondents are insensitive to the scope of the good being valued

on the aggregation of health status measures in the present paper we address the problem of finding conditions under which aggregation of individual health status measurements e g qalys is meaningful in the sense that there is a universal unit of measurement for health the problem is studied in a model where different aspects of health take the form of lancasterian characteristics to be produced by the individuals using commodities obtained in the market for a meaningful unit of measurement to exist marginal rates of substitution between different aspects of health should not differ among individuals and for this to happen in an equilibrium of the economy considered certain assumptions of separability of technology and or preferences must be satisfied this means that universal measures of health will be meaningful only if there are not too many spillovers in achieving different aspects of health

qalys and the equity efficiency trade off as the volume of research on quality adjusted life years qalys has increased concern has begun to be expressed about the equity aspects of resource allocation decisions based on the results of this research this paper suggests that a common theme running through the criticisms of the qaly approach is a concern about inequality it also suggests that the method for incorporating distributional concerns which is currently being pursued by advocates of the qaly approach will only ever capture concerns other than a concern about inequality the paper suggests a method for incorporating both sets of concerns into resource allocation decisions

how people respond to contingent valuation questions a verbal protocol analysis of willingness to pay for an environmental regulation abstract this paper investigates what a respondent is thinking when answering a willingness to pay question in a contingent valuation using a think aloud technique from psychology called verbal protocol analysis the willingness to pay responses we observed seem to be constructed from a variety of considerations including an obligation to pay a fair share of the cost of the solution and signaling concern for a larger set of environmental issues the finding that respondents seem to construct their values at the time they are asked rather than reporting a more well defined value is seen as consistent with over two decades of research on the psychology of decision making potential uses of verbal protocols in contingent valuation studies are also discussed

life cycle preferences over consumption and health when is cost effectiveness analysis equivalent to cost benefit analysis this paper studies life cycle preferences over consumption and health status we show that cost effectiveness analysis is consistent with cost benefit analysis if the lifetime utility function is additive over time multiplicative in the utility of consumption and the utility of health status and if the utility of consumption is constant over time we derive the conditions under which the lifetime utility function takes this form both under expected utility theory and under rank dependent utility theory which is currently the most important nonexpected utility theory if cost effectiveness analysis is consistent with cost benefit analysis it is possible to derive tractable expressions for the willingness to pay for quality adjusted life years qalys the willingness to pay for qalys depends on wealth remaining life expectancy health status and the possibilities for intertemporal substitution of consumption

accounting for future costs in medical cost effectiveness analysis most medical cost effectiveness analyses include future costs only for related illnesses but this approach is controversial this paper demonstrates that cost effectiveness analysis is consistent with lifetime utility maximization only if it includes all future medical and non medical expenditures estimates of the magnitude of these future costs suggest that they may substantially alter both the absolute and relative cost effectiveness of medical interventions particularly when an intervention increases length of life more than quality of life in older populations current methods overstate the cost effectiveness of interventions which extend life compared to interventions which improve the quality of life

valuing morbidity an integration of the willingness to pay and health status index literatures placing dollar values on human health has long been a controversial aspect of policy analysis and remains difficult given the relatively small number of morbidity valuation studies available by combining both the economic and health literature this paper offers an alternative approach to morbidity valuation and provides estimates for a wide range of short term health conditions

using a discrete choice experiment to estimate health state utility values in this study we explored a novel application of the discrete choice experiment dce that resembles the time trade off tto task to estimate values on the health utility scale for the eq 5d the dce was tested in a survey alongside the tto in a sample of english speaking canadians recruited by a market research company the study found that the dce is able to derive logical and consistent values for health states valued on the full health dead scale the dce overcame some issues identified in the version of tto currently used to value eq 5d notably allowing for fewer data exclusions and incorporating values considered worse than dead without introducing a separate valuation procedure this has important implications for providing robust values that represent the preferences of all respondents

the utility of health and wealth abstract tradeoffs between health and wealth are among the most important decisions individuals make and are central to social and economic policy yet only a few studies have investigated the utility of health and wealth empirically this paper investigates this utility function both theoretically and empirically we conduct detailed personal interviews with 180 cancer patients and also obtain questionnaires from 132 diabetes patients we find strong support for the utility function u h w h log w where h denotes health and w denotes wealth

the estimation of a preference based measure of health from the sf 36 this paper reports on the findings of a study to derive a preference based measure of health from the sf 36 for use in economic evaluation the sf 36 was revised into a six dimensional health state classification called the sf 6d a sample of 249 states defined by the sf 6d have been valued by a representative sample of 611 members of the uk general population using standard gamble models are estimated for predicting health state valuations for all 18 000 states defined by the sf 6d the econometric modelling had to cope with the hierarchical nature of the data and its skewed distribution the recommended models have produced significant coefficients for levels of the sf 6d which are robust across model specification however there are concerns with some inconsistent estimates and over prediction of the value of the poorest health states these problems must be weighed against the rich descriptive ability of the sf 6d and the potential application of these models to existing and future sf 36 data set

information revelation through bunching abstract in this paper we analyze a dynamic game of pure information externality each player receives a private signal and chooses whether and when to invest bunching occurs when a subgroup of the players make decisions contingent on their signals while the rest of the players wait regardless of their signals we focus on asymmetric pure strategy equilibria where players private information is revealed gradually through bunching when players become patient enough the most efficient equilibrium contains no herding of investing while the least efficient equilibrium resembles the outcomes in an exogenous timing model when players discount factors differ less patient players will bunch earlier than more patient players

models of quality adjusted life years when health varies over time survey and analysis quality adjusted life year qaly models are widely used for economic evaluation in the health care sector in the first part of the paper we establish an overview of qaly models where health varies over time and provide a theo retical analysis of model identification and parameter estimation from time trade off tto and standard gamble sg scores we investigate deterministic and probabilistic models and consider five different families of discounting functions in all the second part of the paper discusses four issues recurrently debated in the literature this discussion includes questioning the sg method as the gold standard for estimation of the health state index re examining the role of the constant proportional trade off condition revisiting the problem of double dis counting of qalys and suggesting that it is not a matter of choosing between tto and sg procedures as the combination of these two can be used to disen tangle risk aversion from discounting we find that caution must be taken when drawing conclusions from models with chronic health states to situations where health varies over time one notable difference is that in the former case risk aversion may be indistinguishable from discounting models of quality adjusted life years qalys are widely used as health related quality of life measures for economic evaluation in the health care sector in its simplest form the qaly approach assumes that the utility of a profile of health states over time may be estimated by adding the values of the constituent health states in the health profile in more sophisticated models health events occurring in the future may be discounted or risk adjusted

strategic delay and the onset of investment cascades i study the phenomenon of herd behavior in a framework where agents can endogenously choose both the actions and the timing of their actions i assume that agents may have privately known quality and content of information a unique symmetric equilibrium in pure strategies is proved to exist and characterized in its closed form an investment cascade always occurs in the equilibrium and a strategic delay is shown to exist before the sudden onset of the investment cascade i also examine the loss of welfare from delay and information cascade

measurement of health state utilities for economic appraisal health status measurement for use in economic appraisal of health care programmes is reviewed in this paper with particular emphasis on utility measurement a framework for economic appraisal is presented displaying the various components that must be measured and showing how the three forms of analysis cost effectiveness analysis cost benefit analysis and cost utility analysis relate to the framework and to each other one of the components in the framework is health status it can be measured using ad hoc numeric scales willingness to pay receive or health state utilities the determination of health state utilities is reviewed covering the following issues alternative sources of utilities health state descriptions multi attribute utility approach determination of appropriate subjects utility aggregation and accuracy three measurement techniques for health state utilities are described in detail rating scale standard gamble and time trade off the use of these methods is described for both chronic and temporary health states and for both health states considered better than death and those considered worse than death

information revelation and strategic delay in a model of investment we model investment as an n player game with a pure informational externality each player s payoff depends only on his own action and the state of nature however because a player s action reveals his private information players wait to see what other players will do equilibrium is inefficient because delay is costly and information is imperfectly revealed we characterize the unique symmetric perfect bayesian equilibrium and study the robustness of delay which turns out to be sensitive to the reaction speed and the number of players we establish the following results i when the period length is very short the game ends very quickly and there is a form of herding or informational cascade which results in a collapse of investment ii as the period length increases the possibility of herding disappears iii as the number of players increases the rate of investment and the information flow are eventually independent of the number of players adding more players simply increases the number who delay iv in the limit the time profile of investment is extreme a period of low investment followed either by an investment surge or a collapse

incorporating psycho social considerations into health valuation an experimental study abstract this study used multiple elicitation question modes and group discussions to value psycho social considerations associated with public perceptions of health risks values for saving 100 statistical lives in six different policy contexts varied by 50 largely due to psycho social considerations of choice and control a currency effect was found value of life differentials were smaller when questions were framed directly in the currency of lives saved rather than willingness to pay or public spending to save lives discussions reduced but did not eliminate inconsistencies and slightly increased the relative valuations of health interventions involving less choice and control by those at risk

imprecise preferences and survey design in contingent valuation during recent years the contingent valuation cv method has been widely used to value non marketed goods and services we present the results of a cv study of the value of road safety we find that stated preferences for road safety exhibit considerable imprecision appear subject to various systematic biases and are insensitive to variations in the quantity and quality of the safety improvements concerned one broad implication of these findings may be that for an important class of goods of which safety is one example standard assumptions about the structure of people s preferences may be much too strong a more specific implication concerning the design and conduct of cv surveys is that the noaa panel s widely cited blueprint for good cv practice may rely far too heavily on assumptions about the precision and sensitivity of people s preferences

economic evaluation of services for a national health scheme the case for a fairness based framework in this paper we argue that the usual framework for evaluating health services may need modification in the context of a national health scheme nhs some costs and benefits may need to be ignored or discounted others included at face value and some transfer payments included in the decision algorithm in contrast with the standard framework we argue that economic evaluation in the context of an nhs should focus on social transfers between taxpayers and beneficiaries and that the nature and scope of these transfers is determined by the level of social generosity some of the implications of a modified framework are illustrated with a re examination of i costs and transfer payments ii unrelated future costs iii moral hazard and iv the rule that marginal costs should equal marginal benefits we argue that an explicitly fairness based framework is needed for the evaluation of services in an nhs in contrast the usual welfare economic theoretic framework facilitates the sidelining of issues of fairness

qalys versus hyes what s right and what s wrong a review of the controversy abstract the paper uses an axiomatic approach to the description of individual preferences for health status sequences to resolve the major issues at stake in the recent controversy over qalys versus hyes while the hye accounts for an individual s time preference for health qaly scores based on the time trade off method will generally differ from the number of hyes hyes do not represent preferences for health under risk unless the utility function for reference flows of health is linear collapsing the two step hye assessment procedure into a single step entails a loss of information as regards the utility of a health status sequence although the procedure does represent preferences for health it fails to supply a description in terms of hyes in the case of risk as a remedy a modified hye approach is proposed

the effect of risk context on the value of a statistical life a bayesian meta model this paper presents the first value of statistical life vsl meta analysis that empirically estimates correction factors for out of context benefits transfer bt purposes in the field of mortality risk reductions elicited willingness to pay values in one risk context say road safety are frequently applied in other risk contexts like air pollution however differences in risk perception and the population at risk across contexts are likely to result in diverging vsl estimates in a meta analysis of 26 international stated preference studies a bayesian model is estimated regressing contingent values for mortality risk reductions originating from three different risk contexts on the characteristics of the risk reduction itself and additional variables characterizing the underlying studies a willingness to pay wtp premium for mortality risk reductions in the air pollution and general mortality risk context relative to improving road safety is observed evaluated at the mean road safety vsl estimates should be multiplied by a factor 1 8 before being applicable in the air pollution context moreover in an illustrative bt exercise we find limited overlap in the set of context specific predictive vsl distributions consequently out of context bt results in a substantial over or underestimation of the vsl

standard gamble time trade off and rating scale experimental results on the ranking properties of qalys this paper compares the relative performance of quality adjusted life years qalys based on quality weights elicited by rating scale rs time trade off tto and standard gamble sg the standard against which relative performance is assessed is individual preference elicited by direct ranking the correlation between predicted and direct ranking is significantly higher for tto qalys than for rs qalys and sg qalys this holds both based on mean spearman rank correlation coefficients calculated per individual and based on two social choice rules the method of majority voting and the borda rule undiscounted tto qalys are more consistent with direct ranking than discounted tto qalys

preference refinement in deliberative choice experiments for ecosystem service valuation choice experiments have gained considerable popularity in ecosystem service valuation in a one shot survey respondents are faced with a strenuous task asking them to discover and monetize their preferences for often unfamiliar ecosystem services in a previously unknown hypothetical market situation we present a deliberative choice experiment that aims to generate well rationalized value estimates for policy advice two aspects of deliberation discussion and time to reflect are examined in terms of their effect on preference refinement we find more comprehensive choice motives after deliberation as well as indications for preference adjustment and a slight increase in choice certainty jel q51 q57

qualitative valuation of environmental criteria through a group consensus based on stochastic dominance abstract this paper introduces a qualitative valuation method to elicit stakeholders intensities of preferences for a complex environmental issue and multiple social groups environmental valuation studies have shown that in any complex environment with a diversity of environmental services stakeholders have difficulties using a monetary valuation to make trade offs between different environmental services stated preference methods such as the contingent valuation method cvm have been criticised for their individualistic format and assumptions of commensurability between environmental criteria to alleviate both of these criticisms we propose a qualitative valuation method the method contains a discursive step to allow stakeholders to discuss and construct a list of environmental criteria and alternative plans the list of criteria and plans is subsequently used by a group of experts to formulate an impact matrix im which is to be used in the succeeding individualistic steps of the methodology the first individualistic step consists of asking the stakeholders to rank alternative impacts ais in the im for each single criterion the stakeholders are then asked to express intensities of their preferences through pairwise comparisons between the ais of the constructed rank order on each single criterion these intensities are expressed on a qualitative scale subsequently to provide social intensities of preferences a social preference social rank order is first determined for each single criterion we propose to use the median value among the intensities of preferences as the social intensity of preference by assuming interpersonal comparability and taking into account stochastic monotonocity this is a pre processing step which allows us to reach social intensities of preferences in the lar rangeland iran where several social groups have conflicting interests on rangeland services leading to conflicting preferences on environmental criteria

valuing environmental health effects an economic perspective this paper provides an overview of some of the issues involved in comparing benefit cost analysis and cost effectiveness analysis based on quality adjusted life years as alternative approaches to assessing environmental policies that affect human health it concludes that i although qalys have the advantage of reflecting policy impacts on both health status and longevity in a single scalar measure they are not consistent with utility theory unless individuals preferences satisfy some restrictive conditions ii they do not capture other important aspects of the valuation of changes in mortality and morbidity iii cost effectiveness analysis based on qalys as a measure of effectiveness omits non health related effects of environmental policy and iv it leaves unanswered the important question of what level of environmental regulation is appropriate

how economists allocate time to teaching and research abstract this study investigates three questions i are there differences in teaching and research behavior between economists and other professors ii do economists in the top 100 research dep