Would you rather be ill now, or later?
AbstractThe Time Tradeoff (TTO) method is used to calculate the quality adjustment of the Quality Adjusted Life Year, and is therefore an important element in the calculation of the benefits of medical interventions. New specifications of TTO, known as ‘lead time’ TTO and ‘lag time’ TTO, have been developed to overcome methodological issues of the ‘classic’ TTO. In the lead time TTO, ill-health is explicitly placed in the future, after a period of good health, while in lag time TTO a health state starts immediately and is followed by a ‘lag time’ of good health. In this study, we take advantage of these timing properties of lead and lag time TTO. In particular, we use data from a previous study that employed lead and lag time TTO to estimate their implied discounting parameters. We show that individuals prefer being ill later, rather than now, with larger per-period discount rates for longer durations of the health states.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37990.
Date of creation: 05 Apr 2012
Date of revision:
TTO; Time preference; discounting; lead time TTO; lag time TTO;
Other versions of this item:
- D90 - Microeconomics - - Intertemporal Choice - - - General
- I10 - Health, Education, and Welfare - - Health - - - General
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- Devlin, N. & Tsuchiya, A. & Buckingham, K. & Tilling, C., 2009.
"A uniform Time Trade Off method for states better and worse than dead: feasibility study of the ‘lead time’ approach,"
09/08, Department of Economics, City University London.
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