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Putting different price tags on the same health condition: Re-evaluating the well-being valuation approach

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  • Powdthavee, Nattavudh
  • van den Berg, Bernard

Abstract

Many recent writings in health policy have proposed that health be valued directly and in monetary terms using the new well-being valuation method. Yet there is no clear consensus on what the best measure of individual's experience may be for the evaluation process. To shed light on this issue, monetary values for a number of health problems are compared across different well-being measures within the same UK data set. We find that, whilst there is strong internal consistency of health impacts within each well-being measure, hugely different monetary valuations are obtained for the same health problem across different well-being measures. Our results, although should only viewed as illustrative, call for economists to rethink about which measure of well-being or experienced utility to be used in the well-being valuation method, should the approach ever be implemented in real policy contexts.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 30 (2011)
Issue (Month): 5 ()
Pages: 1032-1043

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:5:p:1032-1043

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Well-being; Compensation variations; Monetary valuations; Happiness; Health;

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Cited by:
  1. Dolan, Paul & Kavetsos, Georgios & Tsuchiya, Aki, 2013. "Sick but satisfied: The impact of life and health satisfaction on choice between health scenarios," Journal of Health Economics, Elsevier, vol. 32(4), pages 708-714.
  2. Powdthavee, Nattavudh & Stutzer, Alois, 2014. "Economic Approaches to Understanding Change in Happiness," IZA Discussion Papers 8131, Institute for the Study of Labor (IZA).
  3. Ambrey, Christopher L. & Fleming, Christopher M., 2012. "Public greenspace and life satisfaction in urban Australia," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124302, Australian Agricultural and Resource Economics Society.
  4. Ambrey, Christopher L. & Fleming, Christopher M. & Chan, Andrew Yiu-Chung, 2014. "Estimating the cost of air pollution in South East Queensland: An application of the life satisfaction non-market valuation approach," Ecological Economics, Elsevier, vol. 97(C), pages 172-181.
  5. Christian Pfeifer, 2013. "Life satisfaction and the consumption values of partners and friends: Empirical evidence from German panel survey data," Economics Bulletin, AccessEcon, vol. 33(4), pages 3131-3142.
  6. Kountouris, Yiannis & Remoundou, Kyriaki, 2014. "About time: Daylight Saving Time transition and individual well-being," Economics Letters, Elsevier, vol. 122(1), pages 100-103.
  7. Chongvilaivan, Aekapol & Powdthavee, Nattavudh, 2011. "And I Will Try to Fix You: A Study of Heterogeneity in Job Satisfaction with Implications for Flexible Employment Contracts," IZA Discussion Papers 5868, Institute for the Study of Labor (IZA).
  8. Nattavudh Powdthavee, 2012. "Resilience to economic shocks and the long reach of childhood bullying," LSE Research Online Documents on Economics 51520, London School of Economics and Political Science, LSE Library.

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