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A new preference reversal in health utility measurement

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Abstract

A central assumption in health utility measurement is that preferences are invariant to the elicitation method that is used. This assumptioin is challenged by preferences reversals. Previous studies have observed prefrence resersals between choise and matching tasks and between choise and ranking tasks. We present a new preference reversal that entirely choise-based. Because choise is the basic primitive of economics and utility theory, this preference reversal is more fundamental and troubling. The preference reversal was observed in two studies regarding health states after stroke. Both studies involved large representative samples from the Spanish population, interwied professionally and face-to-face. Possible explanations for the preference reversal are the anticipation of disappointment and elation is risky choise anda the impact of ethical co0nsiderations about the value of live.

Suggested Citation

  • Han Bleichrodt & Jose Luis Pinto-Prades, 2007. "A new preference reversal in health utility measurement," Economic Working Papers at Centro de Estudios Andaluces E2007/15, Centro de Estudios Andaluces.
    • Handle: RePEc:cea:doctra:e2007_15
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    File URL: http://www.centrodeestudiosandaluces.info/PDFS/E200715.pdf
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    References listed on IDEAS

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    1. Lena Lundberg & Magnus Johannesson & Dag G.L. Isacson & Lars Borgquist, 1999. "The Relationship between Health-state Utilities and the SF-12 in a General Population," Medical Decision Making, , vol. 19(2), pages 128-140, April.
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    3. Tversky, Amos & Slovic, Paul & Kahneman, Daniel, 1990. "The Causes of Preference Reversal," American Economic Review, American Economic Association, vol. 80(1), pages 204-217, March.
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    5. Peter Fishburn, 1980. "A simple model for the utility of gambling," Psychometrika, Springer;The Psychometric Society, vol. 45(4), pages 435-448, December.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
    8. Birnbaum, Michael H. & Sutton, Sara E., 1992. "Scale convergence and utility measurement," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(2), pages 183-215, July.
    9. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    10. Graham Loomes & Robert Sugden, 1986. "Disappointment and Dynamic Consistency in Choice under Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(2), pages 271-282.
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    Cited by:

    1. Ulrich Schmidt & Michael Stolpe, 2011. "Transitivity in health utility measurement: An experimental analysis," Health Economics Review, Springer, vol. 1(1), pages 1-4, December.
    2. Peter P. Wakker & Daniëlle R. M. Timmermans & Irma Machielse, 2007. "The Effects of Statistical Information on Risk and Ambiguity Attitudes, and on Rational Insurance Decisions," Management Science, INFORMS, vol. 53(11), pages 1770-1784, November.

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    More about this item

    Keywords

    Health utility measurement; preference reversal; choice behavior;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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