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Can we fix it? Yes we can! But what? A new test of procedural invariance in TTO-measurement

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Author Info
Arthur E. Attema (Department of Economics, Erasmus University, Rotterdam, The Netherlands)
Werner B. F. Brouwer (Department of Health Policy and Management & Institute for Medical Technology Assessment, Erasmus University|Erasmus MC, Rotterdam, The Netherlands)

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Abstract

The TTO-method is often used to value health states, but it is susceptible to several biases and methodological difficulties. One of these is a violation of procedural invariance, which means that the way a TTO-question is framed, i.e. either by fixing the period in imperfect health or that in perfect health, can have a substantial effect on the elicited value of a health state. There are four important sources of discrepancy of the two procedures: loss aversion, maximum endurable time, scale compatibility and discounting. In this article, we present the results of a new test of procedural invariance in which we avoided or corrected for two of these sources (discounting and maximum endurable time). Our results indicate that while correcting for discounting does diminish the difference between the two TTO-procedures, a large and significant violation of procedural invariance remains. Loss aversion is probably the main determinant of the remainder of this difference. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1315
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 17 (2008)
Issue (Month): 7 ()
Pages: 877-885
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Handle: RePEc:wly:hlthec:v:17:y:2008:i:7:p:877-885

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Han Bleichrodt & José Luis Pinto & José María Abellán-Perpiñán, 2003. "A Consistency Test of the Time Trade-Off," Working Papers, Research Center on Health and Economics 676, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  2. Donaldson, Cam & Thomas, Ruth & Torgerson, David J, 1997. "Validity of Open-Ended and Payment Scale Approaches to Eliciting Willingness to Pay," Applied Economics, Taylor and Francis Journals, vol. 29(1), pages 79-84, January. [Downloadable!] (restricted)
  3. Dolan, Paul & Jones-Lee, Michael, 1997. "The time trade-off: A note on the effect of lifetime reallocation of consumption and discounting," Journal of Health Economics, Elsevier, vol. 16(6), pages 731-739, December. [Downloadable!] (restricted)
  4. Kristian Schultz Hansen & Lars Peter Østerdal, 2006. "Models of Quality-Adjusted Life Years when Health Varies Over Time: Survey and Analysis," Journal of Economic Surveys, Blackwell Publishing, vol. 20(2), pages 229-255, 04. [Downloadable!] (restricted)
  5. Dolan, Paul, 2000. "The measurement of health-related quality of life for use in resource allocation decisions in health care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 32, pages 1723-1760 Elsevier. [Downloadable!] (restricted)
  6. Han Bleichrodt, 2002. "A new explanation for the difference between time trade-off utilities and standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 447-456. [Downloadable!]
  7. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December. [Downloadable!] (restricted)
  8. Knetsch, Jack L, 1989. "The Endowment Effect and Evidence of Nonreversible Indifference Curves," American Economic Review, American Economic Association, vol. 79(5), pages 1277-84, December. [Downloadable!] (restricted)
  9. Anne Spencer, 2003. "The TTO method and procedural invariance," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 655-668. [Downloadable!]
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