Can we fix it? Yes we can! But what? A new test of procedural invariance in TTO-measurement
The TTO-method is often used to value health states, but it is susceptible to several biases and methodological difficulties. One of these is a violation of procedural invariance, which means that the way a TTO-question is framed, i.e. either by fixing the period in imperfect health or that in perfect health, can have a substantial effect on the elicited value of a health state. There are four important sources of discrepancy of the two procedures: loss aversion, maximum endurable time, scale compatibility and discounting. In this article, we present the results of a new test of procedural invariance in which we avoided or corrected for two of these sources (discounting and maximum endurable time). Our results indicate that while correcting for discounting does diminish the difference between the two TTO-procedures, a large and significant violation of procedural invariance remains. Loss aversion is probably the main determinant of the remainder of this difference. Copyright © 2007 John Wiley & Sons, Ltd.
Volume (Year): 17 (2008)
Issue (Month): 7 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Han Bleichrodt & José Luis Pinto & José María Abellán-Perpiñán, 2003.
"A consistency test of the time trade-off,"
Working Papers, Research Center on Health and Economics
676, Department of Economics and Business, Universitat Pompeu Fabra.
- Cam Donaldson & Ruth Thomas & David Torgerson, 1997. "Validity of open-ended and payment scale approaches to eliciting willingness to pay," Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 79-84.
- Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
- Bleichrodt, Han & Gafni, Amiram, 1996. "Time preference, the discounted utility model and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 49-66, February.
- Kristian Schultz Hansen & Lars Peter �sterdal, 2006. "Models of Quality-Adjusted Life Years when Health Varies Over Time: Survey and Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 229-255, 04.
- 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.
- Han Bleichrodt, 2002. "A new explanation for the difference between time trade-off utilities and standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 447-456.
- Dolan, Paul, 2000. "The measurement of health-related quality of life for use in resource allocation decisions in health care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 32, pages 1723-1760 Elsevier.
- Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-48, December.
- Knetsch, Jack L, 1989. "The Endowment Effect and Evidence of Nonreversible Indifference Curves," American Economic Review, American Economic Association, vol. 79(5), pages 1277-84, December.
- Anne Spencer, 2003. "The TTO method and procedural invariance," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 655-668.
When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:17:y:2008:i:7:p:877-885. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.