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Toward a more universal approach in health valuation


  • Benjamin M. Craig
  • Jan J. V. Busschbach


By polling individual responses to hypothetical scenarios, valuation studies estimate population preferences toward health on a quality-adjusted life year (QALY) scale. The scenarios typically involve trade‐offs in time (time trade‐off (TTO)), risk (standard gamble (SG)), or number of persons affected (person trade‐off (PTO)). This paper revisits the QALY assumptions and provides a coherent health econometric approach that unites TTO, SG, and PTO techniques under a common estimator. The proposed approach avoids the use of ratio statistics in QALY estimation and the common convention of arbitrarily changing trade‐off responses. As an example, 34% of the TTO responses from the seminal Measurement and Valuation of Health study were changed in the original UK analysis, which led to substantially lower QALY estimates. As a general rule, if the original estimate is less than 0.5 QALYs, add 0.25 QALYs to get the new estimates. Copyright (C) 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • Benjamin M. Craig & Jan J. V. Busschbach, 2011. "Toward a more universal approach in health valuation," Health Economics, John Wiley & Sons, Ltd., vol. 20(7), pages 864-875, July.
  • Handle: RePEc:wly:hlthec:v:20:y:2011:i:7:p:864-875

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    References listed on IDEAS

    1. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    2. Nair-Reichert, Usha & Weinhold, Diana, 2001. " Causality Tests for Cross-Country Panels: A New Look at FDI and Economic Growth in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(2), pages 153-171, May.
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    Cited by:

    1. Bansback, Nick & Brazier, John & Tsuchiya, Aki & Anis, Aslam, 2012. "Using a discrete choice experiment to estimate health state utility values," Journal of Health Economics, Elsevier, vol. 31(1), pages 306-318.
    2. Méndez, Ildefonso & Abellán Perpiñán, Jose M. & Sánchez Martínez, Fernando I. & Martínez Pérez, Jorge E., 2011. "Inverse probability weighted estimation of social tariffs: An illustration using the SF-6D value sets," Journal of Health Economics, Elsevier, vol. 30(6), pages 1280-1292.


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