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Estimating the monetary value of health and capability well-being applying the well-being valuation approach

Author

Listed:
  • Sebastian Himmler

    (Erasmus University Rotterdam)

  • Job Exel

    (Erasmus University Rotterdam
    Erasmus University Rotterdam)

  • Werner Brouwer

    (Erasmus University Rotterdam)

Abstract

Background Quality of life measures going beyond health, like the ICECAP-A, are gaining importance in health technology assessment. The assessment of the monetary value of gains in this broader quality of life is needed to use these measurements in a cost-effectiveness framework. Methods We applied the well-being valuation approach to calculate a first monetary value for capability well-being in comparison to health, derived by ICECAP-A and EQ-5D-5L, respectively. Data from an online survey administered in February 2018 to a representative sample of UK citizens aged 18–65 was used (N = 1512). To overcome the endogeneity of income, we applied an instrumental variable regression. Several alternative model specifications were calculated to test the robustness of the results. Results The base case empirical estimate for the implied monetary value of a year in full capability well-being was £66,597. The estimate of the monetary value of a QALY, obtained from the same sample and using the same methodology amounted to £30,786, which compares well to previous estimates from the willingness to pay literature. Throughout the conducted robustness checks, the value of capability well-being was found to be between 1.7 and 2.6 times larger than the value of health. Conclusion While the applied approach is not without limitations, the generated insights, especially concerning the relative magnitude of valuations, may be useful for decision-makers having to decide based on economic evaluations using the ICECAP-A measure or, to a lesser extent, other (capability) well-being outcome measures.

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  • Sebastian Himmler & Job Exel & Werner Brouwer, 2020. "Estimating the monetary value of health and capability well-being applying the well-being valuation approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(8), pages 1235-1244, November.
  • Handle: RePEc:spr:eujhec:v:21:y:2020:i:8:d:10.1007_s10198-020-01231-7
    DOI: 10.1007/s10198-020-01231-7
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 26th October 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-10-26 12:00:03

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    Cited by:

    1. Kinghorn, Philip & Afentou, Nafsika, 2021. "Eliciting a monetary threshold for a year of sufficient capability to inform resource allocation decisions in public health and social care," Social Science & Medicine, Elsevier, vol. 279(C).

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    More about this item

    Keywords

    Capability approach; Economic evaluation; Value of health; Subjective well-being; Well-being valuation;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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