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Capabilities as Menus: A Non-Welfarist Basis for QALY Evaluation

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  • Bleichrodt, Han
  • Quiggin, John

Abstract

Quality-Adjusted Life Years (QALYs) are the most widely-used measure of health in cost–effectiveness analysis and cost–benefit analysis. Within a welfarist framework QALYs are consistent with people’s preferences under stringent assumptions. Several authors have argued that QALYs are a valid measure of health within an extra-welfarist framework. This paper studies the applicability of QALYs within the best-known extra-welfarist framework, Sen’s capability approach. We propose a procedure to value capability sets and provide a foundation for QALYs within Sen’s capability approach. We show that, under appropriate conditions, the ranking of capabilities can be represented locally by a QALY measure and that a shadow price for QALYs can be defined.

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  • Bleichrodt, Han & Quiggin, John, 2011. "Capabilities as Menus: A Non-Welfarist Basis for QALY Evaluation," Risk and Sustainable Management Group Working Papers 151199, University of Queensland, School of Economics.
  • Handle: RePEc:ags:uqsers:151199
    DOI: 10.22004/ag.econ.151199
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    2. Engel, L. & Chudyk, A.M. & Ashe, M.C. & McKay, H.A. & Whitehurst, D.G.T. & Bryan, S., 2016. "Older adults' quality of life – Exploring the role of the built environment and social cohesion in community-dwelling seniors on low income," Social Science & Medicine, Elsevier, vol. 164(C), pages 1-11.
    3. Paul Anand & Laurence S. J. Roope & Anthony J. Culyer & Ron Smith, 2020. "Disability and multidimensional quality of life: A capability approach to health status assessment," Health Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 748-765, July.
    4. Mitchell, Paul Mark & Roberts, Tracy E. & Barton, Pelham M. & Coast, Joanna, 2015. "Assessing sufficient capability: A new approach to economic evaluation," Social Science & Medicine, Elsevier, vol. 139(C), pages 71-79.
    5. Pickles, Kristen & Lancsar, Emily & Seymour, Janelle & Parkin, David & Donaldson, Cam & Carter, Stacy M., 2019. "Accounts from developers of generic health state utility instruments explain why they produce different QALYs: A qualitative study," Social Science & Medicine, Elsevier, vol. 240(C).

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    More about this item

    Keywords

    Health Economics and Policy;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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