This paper locates the Time Trade-off (TTO) method conventionally used to value health states within a Hicks utility theory framework, in which both compensating variation and equivalent variation methods are possible for the valuation of health gains and health reductions at a specified initial life expectancy. Section 1 briefly describes that theory and posits four distinctive valuation approaches arising from it: each of compensating variation and equivalent variation for both gains and losses. Recent developments and research on TTO valuation are placed in the context of this framework. Section 2 describes a pilot study in which the feasibility of eliciting valuations using each of the four alternatives is explored, and the resultant valuation data compared. Section 3 presents the results from that pilot. We conclude in Section 4 by speculating about the characteristics of the utility function for health states and length of life suggested by our results, and highlight important implications for the current use of TTO valuations in economic evaluation.
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