Estimating sign-dependent societal preferences for quality of life

Abstract

ABSTRACT. This paper is the first to apply prospect theory to societal health-related decision making. In particular, we allow for utility curvature, equity weighting, sign-dependence, and loss aversion in choices concerning quality of life of other people. We find substantial inequity aversion, both for gains and losses, which can be attributed to both diminishing marginal utility and differential weighting of better-off and worse-off. There are also clear framing effects, which violate expected utility. Moreover, we observe loss aversion, indicating that respondents give more weight to one group's loss than another group's gain of the same absolute magnitude. We also elicited some information on the effect of the age of the studied group. The amount of inequity aversion is to some extent influenced by the age of the considered patients. In particular, more inequity aversion is observed for gains of older people than gains of younger people.

Eliciting the Level of Health Inequality Aversion in England

“…There have been a number of previous empirical studies of health inequality aversion using the same basic questionnaire instrument in England (Williams et al ., ; Dolan and Tsuchiya, ; Dolan and Tsuchiya, ; Dolan and Tsuchiya, ) and Spain (Abásolo and Tsuchiya, ; Abásolo and Tsuchiya, ; Abásolo and Tsuchiya, ). All of these studies have found that the majority of the population is willing to sacrifice a substantial amount of total health in order to reduce health inequality, as have most studies using different instruments (Edlin et al ., ; Attema et al ., ). In most cases, it is not possible to extract comparable inequality aversion parameter central estimates, because parameters were not reported or are not comparable.…”

Peer effects in health valuation: the relation between rating of contemporaries’ health and own health

“…This seems to be caused by a general tendency to be pessimistic about one's own health compared to peers' health in the VAS tasks. When splitting the dataset into three age groups (18)(19)(20)(21)(22)(23)(24)(25)(26)(27)(28)(29)(30)(31)(32)(33)(34)(35)(36)(37)(38)(39)(40)(41)(42)(43)(44)(45)(46)(47)(48)(49)(50)(51)(52)(53)(54)(55), 56-75), we found VAS_OWN to be lower than VAS_OTHER for each separate age class as well (paired t-tests: all p < 0.01), making this finding universal across age. Because the residuals were heteroscedastic (White's test, p < 0.01), we conducted a regression with White heteroscedasticity-consistent standard errors to test Hypothesis 2.…”

“…In this paper we combine the data of three separate online surveys, administered by the authors of this paper in 2013 and 2014. Two of these are reported elsewhere [28,29]. The three surveys aimed to elicit individual and societal preferences for health outcomes 1 and all contained a number of questions about relative health (see Table 5), which were not used for the aforementioned papers.…”

“…1 One paper [28] is about eliciting preferences for distributions of quality of life among groups (n = 517). The second paper [29] is about measuring individual preferences for quality of life in a prospect theory framework (n = 463).…”

Fairness in cost-benefit analysis: A methodology for health technology assessment

“…If one takes the position of “empirical ethics,” however, then social welfare judgments should also be based on preferences of the individuals. In that case, it becomes relevant that many individuals do not reason within the expected utility framework that is underlying our analysis (see, e.g., Attema, Brouwer, l'Haridon, & Pinto, ). Although we believe that empirical research on value judgments is very useful (see Gaertner and Schokkaert, ), we do not think that average subjective preferences should dictate the social objective that is used in CBA and we believe that there are good normative reasons to adopt the SWF with a sensitivity analysis for ρ .…”