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An Experimental Test of a Theoretical Foundation for Rating-scale Valuations

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  • Han Bleichrodt
  • Magnus Johannesson

Abstract

A major advantage of using a rating scale in health-utility measurement is its practical applicability: the method is relatively easy to understand, and various health states can be assessed simultaneously. However, a theoretical foundation for rating-scale valuations has not been established. The primary aim of this paper is to present a theoretical foundation for rating-scale valuations based on the theory of measurable value functions and to provide a consistency test to see whether rating-scale valuations do indeed elicit a measurable value function. If rating-scale valuations elicit a measurable value function, then Dyer and Sarin have shown how they are related to von Neumann-Morgenstern (vNM) utilities. The appropriate technique to measure vNM utilities is the standard gamble. Torrance has suggested that rating-scale valuations and standard-gamble valuations are related by a power function. A secondary aim of this paper is to examine the relationship between rating-scale valuations and standard-gamble valuations hypothesized by Torrance. An experiment was designed to test consistency of rating-scale valuations and the relationship between rating-scale valuations and standard-gamble valuations. The experiment tested whether rating-scale valuations are independent of the context in which they are elicited, as they should be if they elicit points on a measurable value function. 80 Swedish and 92 Dutch respondents participated in the experiment. The results showed that rating-scale valuations depend on the number of preferred alternatives in the task and thus violate a basic property of measurable value functions. The estimation of the power function did not result in stable results: parameter estimates varied, in some cases there was indication of misspecification, and in most cases there was indication of heteroskedastic errors. The implications of these findings for the common use of rating-scale valuations in cost-utility analysis are serious: the dependency of the rating-scale valuations on the other health states included in the task casts serious doubts on the validity of the rating-scale method. Key words: QALYs; rating scale; cost-utility analysis; medical decision making. (Med Decis Making 1997;17:208-216))

Suggested Citation

  • Han Bleichrodt & Magnus Johannesson, 1997. "An Experimental Test of a Theoretical Foundation for Rating-scale Valuations," Medical Decision Making, , vol. 17(2), pages 208-216, April.
    • Handle: RePEc:sae:medema:v:17:y:1997:i:2:p:208-216
    DOI: 10.1177/0272989X9701700212
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    References listed on IDEAS

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    1. George W. Torrance & Michael H. Boyle & Sargent P. Horwood, 1982. "Application of Multi-Attribute Utility Theory to Measure Social Preferences for Health States," Operations Research, INFORMS, vol. 30(6), pages 1043-1069, December.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    3. Rakesh Kumar Sarin, 1982. "Strength of Preference and Risky Choice," Operations Research, INFORMS, vol. 30(5), pages 982-997, October.
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    Cited by:

    1. Brazier, J, 2005. "Current state of the art in preference-based measures of health and avenues for further research," MPRA Paper 29762, University Library of Munich, Germany.
    2. Stevens, Katherine & McCabe, Christopher & Brazier, John & Roberts, Jennifer, 2007. "Multi-attribute utility function or statistical inference models: A comparison of health state valuation models using the HUI2 health state classification system," Journal of Health Economics, Elsevier, vol. 26(5), pages 992-1002, September.
    3. Gerdtham, Ulf-G. & Johannesson, Magnus, 1999. "New estimates of the demand for health: results based on a categorical health measure and Swedish micro data," Social Science & Medicine, Elsevier, vol. 49(10), pages 1325-1332, November.
    4. Paul F. M. Krabbe & Elly A. Stolk & Nancy J. Devlin & Feng Xie & Elise H. Quik & A. Simon Pickard, 2017. "Head-to-head comparison of health-state values derived by a probabilistic choice model and scores on a visual analogue scale," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(8), pages 967-977, November.
    5. Julie Ratcliffe & John Brazier & Aki Tsuchiya & Tara Symonds & Martin Brown, 2009. "Using DCE and ranking data to estimate cardinal values for health states for deriving a preference‐based single index from the sexual quality of life questionnaire," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1261-1276, November.
    6. Gerdtham, U. -G. & Johannesson, M. & Lundberg, L. & Isacson, D., 1999. "A note on validating Wagstaff and van Doorslaer's health measure in the analysis of inequalities in health," Journal of Health Economics, Elsevier, vol. 18(1), pages 117-124, January.
    7. L. M. Lamers & J. McDonnell & P. F. M. Stalmeier & P. F. M. Krabbe & J. J. V. Busschbach, 2006. "The Dutch tariff: results and arguments for an effective design for national EQ‐5D valuation studies," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1121-1132, October.
    8. Oliver, Adam, 2006. "Further evidence of preference reversals: Choice, valuation and ranking over distributions of life expectancy," Journal of Health Economics, Elsevier, vol. 25(5), pages 803-820, September.
    9. D. Stratmann‐Schoene & T. Kuehn & R. Kreienberg & R. Leidl, 2006. "A preference‐based index for the SF‐12," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 553-564, June.
    10. Edward J. D. Webb & John O’Dwyer & David Meads & Paul Kind & Penny Wright, 2020. "Transforming discrete choice experiment latent scale values for EQ-5D-3L using the visual analogue scale," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(5), pages 787-800, July.

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