A consistency test of the time trade-off
AbstractThis paper tests the internal consistency of time trade-off utilities. We find significant violations of consistency in the direction predicted by loss aversion. The violations disappear for higher gauge durations. We show that loss aversion can also explain that for short gauge durations time trade-off utilities exceed standard gamble utilities. Our results suggest that time trade-off measurements that use relatively short gauge durations, like the widely used EuroQol algorithm (Dolan 1997), are affected by loss aversion and lead to utilities that are too high.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Working Papers, Research Center on Health and Economics with number 676.
Date of creation: Mar 2003
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Web page: http://www.econ.upf.edu/
Cost-Utility Analysis; Time Trade-Off; Loss Aversion;
Other versions of this item:
- I10 - Health, Education, and Welfare - - Health - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-26 (All new papers)
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