IDEAS home Printed from https://ideas.repec.org/p/ags/nceewp/280832.html
   My bibliography  Save this paper

Benefit Transfer Functions for Avoided Morbidity: A Preference Calibration Approach

Author

Listed:
  • Van Houtven, George L.
  • Pattanayak, Subhrendu K.
  • Smith, V. Kerry

Abstract

Preference calibration has been proposed as a method for improving benefit transfers (Smith et al., 2002). The objective of this method is to develop a WTP function that can be used to predict individuals’ values for a wide range of quality changes. The analyst’s specification of preferences determines the form of this WTP function, and existing empirical studies provide the information that is needed to identify values for its parameters. The purpose of this paper is to explore and illustrate how the logic of preference calibration can be applied in the area of morbidity valuation. Using relatively simple functional forms for utility, we consider both acute (short-term) and chronic (long-term) illness. To identify values for key preference parameters, we combine information about WTP, health indexes, income, and, in some cases, duration of illness. We then use the calibrated parameters to specify WTP functions. Finally, we demonstrate how these functions can serve as benefit transfer functions, using them to predict WTP for a range of reductions in the severity and/or duration of illness and for different income levels.

Suggested Citation

  • Van Houtven, George L. & Pattanayak, Subhrendu K. & Smith, V. Kerry, 2004. "Benefit Transfer Functions for Avoided Morbidity: A Preference Calibration Approach," National Center for Environmental Economics-NCEE Working Papers 280832, United States Environmental Protection Agency (EPA).
    • Handle: RePEc:ags:nceewp:280832
    DOI: 10.22004/ag.econ.280832
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/280832/files/NCEE2004-04.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.280832?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lauraine G. Chestnut & L. Robin Keller & William E. Lambert & Robert D. Rowe, 1996. "Measuring Heart Patients' Willingness to Pay for Changes in Angina Symptoms," Medical Decision Making, , vol. 16(1), pages 65-76, February.
    2. F. Reed Johnson & Melissa Ruby Banzhaf & William H. Desvousges, 2000. "Willingness to pay for improved respiratory and cardiovascular health: a multiple‐format, stated‐preference approach," Health Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 295-317, June.
    3. V. Kerry Smith & George Van Houtven & Subhrendu K. Pattanayak, 2002. "Benefit Transfer via Preference Calibration: "Prudential Algebra" for Policy," Land Economics, University of Wisconsin Press, vol. 78(1), pages 132-152.
    4. Joseph S. Pliskin & Donald S. Shepard & Milton C. Weinstein, 1980. "Utility Functions for Life Years and Health Status," Operations Research, INFORMS, vol. 28(1), pages 206-224, February.
    5. Thompson, M.S., 1986. "Willingness to pay and accept risks to cure chronic disease," American Journal of Public Health, American Public Health Association, vol. 76(4), pages 392-396.
    6. Jhonson, F. Reed & Fries, Erin E. & Banzhaf, H. Spencer, 1997. "Valuing morbidity: An integration of the willingness-to-pay and health-status index literatures," Journal of Health Economics, Elsevier, vol. 16(6), pages 641-665, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George L. Van Houtven & Subhrendu K. Pattanayak & V. Kerry Smith, 2004. "Benefit Transfer Functions for Avoided Morbidity: A Preference Calibration Approach," NCEE Working Paper Series 200404, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Apr 2004.
    2. George Van Houtven & John Powers & Amber Jessup & Jui‐Chen Yang, 2006. "Valuing avoided morbidity using meta‐regression analysis: what can health status measures and QALYs tell us about WTP?," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 775-795, August.
    3. Kevin Haninger & James K. Hammitt, 2011. "Diminishing Willingness to Pay per Quality‐Adjusted Life Year: Valuing Acute Foodborne Illness," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1363-1380, September.
    4. Hammitt, James & Haninger, Kevin, 2011. "Valuing Morbidity Risk: Willingness to Pay per Quality-Adjusted Life Year," LERNA Working Papers 11.09.343, LERNA, University of Toulouse.
    5. Mansfield, Carol & Reed Johnson, F. & Van Houtven, George, 2006. "The missing piece: Valuing averting behavior for children's ozone exposures," Resource and Energy Economics, Elsevier, vol. 28(3), pages 215-228, August.
    6. Richard D. Smith, 2003. "Construction of the contingent valuation market in health care:a critical assessment," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 609-628, August.
    7. A. Freeman, 2006. "Valuing Environmental Health Effects – An Economic Perspective," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 347-363, July.
    8. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326, June.
    9. Blumenschein, K. & Johannesson, M., 1996. "The authors reply," Health Policy, Elsevier, vol. 37(3), pages 201-204, September.
    10. Mark D. Agee & Thomas D. Crocker, 2004. "Transferring Measures of Adult Health Benefits to Children: A Review of Issues and Results," Contemporary Economic Policy, Western Economic Association International, vol. 22(4), pages 468-482, October.
    11. Blumenschein, Karen & Johannesson, Magnus, 1996. "Incorporating quality of life changes into economic evaluations of health care: an overview," Health Policy, Elsevier, vol. 36(2), pages 155-166, May.
    12. James Hammitt, 2013. "Admissible utility functions for health, longevity, and wealth: integrating monetary and life-year measures," Journal of Risk and Uncertainty, Springer, vol. 47(3), pages 311-325, December.
    13. Herrera-Araujo, Daniel & Hammitt, James K. & Rheinberger, Christoph M., 2020. "Theoretical bounds on the value of improved health," Journal of Health Economics, Elsevier, vol. 72(C).
    14. Ibanez, Marcela & Carlsson, Fredrik, 2010. "A survey-based choice experiment on coca cultivation," Journal of Development Economics, Elsevier, vol. 93(2), pages 249-263, November.
    15. F. Reed Johnson & John J. Sheehan & Semra Ozdemir & Matthew Wallace & Jui-Chen Yang, 2025. "How Much Better is Faster? Empirical Tests of QALY Assumptions in Health-Outcome Sequences," PharmacoEconomics, Springer, vol. 43(1), pages 45-52, January.
    16. Kangethe, Anne & Franic, Duska M. & Corso, Phaedra S., 2016. "Comparing the validity of the payment card and structured haggling willingness to pay methods: The case of a diabetes prevention program in rural Kenya," Social Science & Medicine, Elsevier, vol. 169(C), pages 86-96.
    17. Herrera-Araujo, Daniel & Rheinberger, Christoph M. & Hammitt, James K., 2022. "Valuing non-marginal changes in mortality and morbidity risk," Journal of Health Economics, Elsevier, vol. 84(C).
    18. Johnson, F. Reed & Ozdemir, Semra & Phillips, Kathryn A., 2010. "Effects of simplifying choice tasks on estimates of taste heterogeneity in stated-choice surveys," Social Science & Medicine, Elsevier, vol. 70(2), pages 183-190, January.
    19. Joanna Coast & Hareth Al‐Janabi & Eileen J. Sutton & Susan A. Horrocks & A. Jane Vosper & Dawn R. Swancutt & Terry N. Flynn, 2012. "Using qualitative methods for attribute development for discrete choice experiments: issues and recommendations," Health Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 730-741, June.
    20. Bengt Liljas, 2011. "Welfare, QALYs, and costs – a comment," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 68-72, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:nceewp:280832. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/nepgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.