Deriving time discounting correction factors for TTO tariffs
AbstractThe Time Tradeoff (TTO) method is a popular method for valuing health state utilities and is frequently used in economic evaluations. However, this method produces utilities that are distorted by several biases. One important bias entails the failure to incorporate time discounting. This paper aims to measure time discounting for health outcomes in a sample representative for the general population. In particular, we estimate TTO scores alongside time discounting in order to derive a set of correction factors that can be employed to correct raw TTO scores for the downward bias caused by time discounting. We find substantial positive correction factors, which are increasing with the severity of the health state. Furthermore, higher discounting is found when using more severe health states in the discounting elicitation task. More research is needed to further develop discount rate elicitation procedures and test their validity, especially in general public samples. Moreover, future research should investigate the correction of TTO score for other biases as well, such as loss aversion, and to develop a criterion to test the external validity of TTO scores.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37002.
Date of creation: 02 Feb 2012
Date of revision:
Discounting; QALY model; Time Tradeoff; Utility Measurement;
Find related papers by JEL classification:
- D90 - Microeconomics - - Intertemporal Choice - - - General
- I10 - Health, Education, and Welfare - - Health - - - General
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