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Deriving time discounting correction factors for TTO tariffs

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  • Attema, Arthur
  • Brouwer, Werner

Abstract

The 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.

Suggested Citation

  • Attema, Arthur & Brouwer, Werner, 2012. "Deriving time discounting correction factors for TTO tariffs," MPRA Paper 37002, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37002
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    Cited by:

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    2. Stefan A. Lipman & Arthur E. Attema & Matthijs M. Versteegh, 2022. "Correcting for discounting and loss aversion in composite time trade‐off," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1633-1648, August.
    3. Arthur Attema & Yvette Edelaar-Peeters & Matthijs Versteegh & Elly Stolk, 2013. "Time trade-off: one methodology, different methods," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 53-64, July.

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    More about this item

    Keywords

    Discounting; QALY model; Time Tradeoff; Utility Measurement;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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