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When are person tradeoffs valid?

  • Doctor, Jason N.
  • Miyamoto, John
  • Bleichrodt, Han
Registered author(s):

    The person tradeoff (PTO) is commonly used in health economic applications. However, to date it has no theoretical basis. The purpose of this paper is to provide this basis from a set of assumptions that together justify the most common applications of the PTO method. Our analysis identifies the central assumptions in PTO measurements. We test these assumptions in an experiment, but find only limited support for the validity of the PTO.

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    File URL: http://www.sciencedirect.com/science/article/B6V8K-4WM0J5W-1/2/8e4ccfbe10276902fde7e04996fed64e
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    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 28 (2009)
    Issue (Month): 5 (September)
    Pages: 1018-1027

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    Handle: RePEc:eee:jhecon:v:28:y:2009:i:5:p:1018-1027
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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    1. Paul Dolan & Colin Green, 1998. "Using the person trade-off approach to examine differences between individual and social values," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 307-312.
    2. Joshua A. Salomon & Christopher J.L. Murray, 2004. "A multi-method approach to measuring health-state valuations," Health Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 281-290.
    3. Han Bleichrodt & Jose Luis Pinto, 2000. "A Parameter-Free Elicitation of the Probability Weighting Function in Medical Decision Analysis," Management Science, INFORMS, vol. 46(11), pages 1485-1496, November.
    4. repec:cup:cbooks:9780521438834 is not listed on IDEAS
    5. Hey, John D & Orme, Chris, 1994. "Investigating Generalizations of Expected Utility Theory Using Experimental Data," Econometrica, Econometric Society, vol. 62(6), pages 1291-1326, November.
    6. Loomes, Graham & Sugden, Robert, 1998. "Testing Different Stochastic Specifications of Risky Choice," Economica, London School of Economics and Political Science, vol. 65(260), pages 581-98, November.
    7. Paul Dolan & Aki Tsuchiya, 2003. "The person trade-off method and the transitivity principle: an example from preferences over age weighting," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 505-510.
    8. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
    9. Jose-Luis Pinto Prades, 1997. "Is the Person Trade-off a Valid Method for Allocating Health Care Resources?," Health Economics, John Wiley & Sons, Ltd., vol. 6(1), pages 71-81.
    10. Ballinger, T Parker & Wilcox, Nathaniel T, 1997. "Decisions, Error and Heterogeneity," Economic Journal, Royal Economic Society, vol. 107(443), pages 1090-1105, July.
    11. BLEICHRODT, Han & CRAINICH, David & EECKHOUDT, Louis, . "Aversion to health inequalities and priority setting in health care," CORE Discussion Papers RP -2099, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    13. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    14. Mohammed Abdellaoui, 2000. "Parameter-Free Elicitation of Utility and Probability Weighting Functions," Management Science, INFORMS, vol. 46(11), pages 1497-1512, November.
    15. Baron, Jonathan & Ubel, Peter A., 2002. "Types of inconsistency in health-state utility judgments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 89(2), pages 1100-1118, November.
    16. Erik Nord & Jose Luis Pinto & Jeff Richardson & Paul Menzel & Peter Ubel, 1999. "Incorporating societal concerns for fairness in numerical valuations of health programmes," Health Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 25-39.
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