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Increasing marginal utility of small increases in life-expectancy?: Results from a population survey

  • Kvamme, Maria Knoph
  • Gyrd-Hansen, Dorte
  • Olsen, Jan Abel
  • Kristiansen, Ivar Sønbø
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    The standard practice in cost-effectiveness analyses of health care is to assign a linear value to increasing lifetime gains. The aim of the current study was to examine the possible existence of non-linear utility for short life extensions. A representative sample of the Norwegian population, aged 40-59 years (n = 2402), was asked to imagine that they had a limited remaining lifetime (1 year or 10 years) and were offered a treatment that would increase lifetime by a specified amount of time from 1 week to 1 year. In all scenarios, the price per week of life extension was held constant. The proportion of respondents that accepted the treatment increased with increasing extensions, indicating a convex utility function. The result suggests increasing marginal utility for life extensions up to 1 year.

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    File URL: http://www.sciencedirect.com/science/article/B6V8K-4YTFBFH-1/2/8c56c08bd8e1528b0cb1fd7800eb4367
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    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 29 (2010)
    Issue (Month): 4 (July)
    Pages: 541-548

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    Handle: RePEc:eee:jhecon:v:29:y:2010:i:4:p:541-548
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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    1. Dolan, Paul & Jones-Lee, Michael, 1997. "The time trade-off: A note on the effect of lifetime reallocation of consumption and discounting," Journal of Health Economics, Elsevier, vol. 16(6), pages 731-739, December.
    2. Doctor, Jason N. & Bleichrodt, Han & Miyamoto, John & Temkin, Nancy R. & Dikmen, Sureyya, 2004. "A new and more robust test of QALYs," Journal of Health Economics, Elsevier, vol. 23(2), pages 353-367, March.
    3. Moore, Michael J & Viscusi, W Kip, 1990. " Models for Estimating Discount Rates for Long-term Health Risks Using Labor Market Data," Journal of Risk and Uncertainty, Springer, vol. 3(4), pages 381-401, December.
    4. Paul Dolan & Rebecca Shaw & Aki Tsuchiya & Alan Williams, 2005. "QALY maximisation and people's preferences: a methodological review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 197-208.
    5. Eva Rodr�guez-M�guez & José-Luis Pinto-Prades, 2002. "Measuring the social importance of concentration or dispersion of individual health benefits," Health Economics, John Wiley & Sons, Ltd., vol. 11(1), pages 43-53.
    6. Bleichrodt, Han & Doctor, Jason & Stolk, Elly, 2005. "A nonparametric elicitation of the equity-efficiency trade-off in cost-utility analysis," Journal of Health Economics, Elsevier, vol. 24(4), pages 655-678, July.
    7. 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.
    8. Olsen, Jan Abel, 2000. "A note on eliciting distributive preferences for health," Journal of Health Economics, Elsevier, vol. 19(4), pages 541-550, July.
    9. Abdellaoui, Mohammed & Barrios, Carolina & Wakker, Peter P., 2007. "Reconciling introspective utility with revealed preference: Experimental arguments based on prospect theory," Journal of Econometrics, Elsevier, vol. 138(1), pages 356-378, May.
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