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Losing Sight of the Wood for the Trees


  • Paul Dolan
  • Henry Lee


  • Tessa Peasgood


Background and Objective: The ability to value health in a way that allows the comparison of different conditions across a range of population groups is central to determining priorities in healthcare. This paper considers some of the concerns with the ‘received wisdom’ in valuing health — to describe it using a generic descriptive system and to value it using the hypothetical preferences of the general public. Methods: The literature on the dimensions of health that matter most to people was reviewed and this paper discusses the use of global measures of subjective well-being (SWB) as a possible alternative. New analysis of the British Household Panel Survey was conducted to explore the relationship between life satisfaction and the preference-based quality-of-life measure the SF-6D. The impact on life satisfaction of each level for each dimension of the SF-6D is estimated through a linear model predicting life satisfaction with the SF-6D levels as determinants. Results: Valuing changes in the health of the general population via changes in life satisfaction would lead to different weights being attached to the different dimensions of health, as compared to a well used utility score in which weights are taken from general population preferences. If preferences elicited via standard gamble exercises are based only on a prediction of what it would be like to live in a particular health state, then these results suggest that reductions in physical functioning matter less than people imagine and reductions in mental health impact upon our lives more than preferences would suggest. Conclusions: Using data from the British Household Panel Survey, it is shown that a focus on SWB would place greater emphasis on mental health conditions. The implications for health policy are considered. Copyright Springer International Publishing AG 2012

Suggested Citation

  • Paul Dolan & Henry Lee & Tessa Peasgood, 2012. "Losing Sight of the Wood for the Trees," PharmacoEconomics, Springer, vol. 30(11), pages 1035-1049, November.
  • Handle: RePEc:spr:pharme:v:30:y:2012:i:11:p:1035-1049 DOI: 10.2165/11593040-000000000-00000

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    References listed on IDEAS

    1. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
    2. Brazier, John & Roberts, Jennifer & Deverill, Mark, 2002. "The estimation of a preference-based measure of health from the SF-36," Journal of Health Economics, Elsevier, vol. 21(2), pages 271-292, March.
    3. Blanchflower, David G. & Oswald, Andrew J., 2008. "Hypertension and happiness across nations," Journal of Health Economics, Elsevier, vol. 27(2), pages 218-233, March.
    4. Carol Graham & Lucas Higuera & Eduardo Lora, 2009. "Valuing Health Conditions - Insights from Happiness Surveys across Countries and Cultures," Research Department Publications 4635, Inter-American Development Bank, Research Department.
    5. Paul Dolan & Daniel Kahneman, 2008. "Interpretations Of Utility And Their Implications For The Valuation Of Health," Economic Journal, Royal Economic Society, vol. 118(525), pages 215-234, January.
    6. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    7. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    8. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 513-537.
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    Cited by:

    1. Strulik, Holger, 2018. "An economic heory of depression and its impact on health behavior and longevity," Center for European, Governance and Economic Development Research Discussion Papers 337, University of Goettingen, Department of Economics.

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