IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01499635.html
   My bibliography  Save this paper

Equivalent Income and Fair Evaluation of Health Care

Author

Listed:
  • Marc Fleurbaey

    (Woodrow Wilson School and Center for Human Values - Princeton University)

  • Stephane Luchini

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Christophe Muller

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Erik Schokkaert

Abstract

We argue that the economic evaluation of health care (cost–benefit analysis) should respect individual preferences and should incorporate distributional considerations. Relying on individual preferences does not imply subjective welfarism. We propose a particular non-welfarist approach, based on the concept of equivalent income, and show how it helps to define distributional weights. We illustrate the feasibility of our approach with empirical results from a pilot survey.

Suggested Citation

  • Marc Fleurbaey & Stephane Luchini & Christophe Muller & Erik Schokkaert, 2013. "Equivalent Income and Fair Evaluation of Health Care," Post-Print hal-01499635, HAL.
    • Handle: RePEc:hal:journl:hal-01499635
    DOI: 10.1002/hec.2859
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marc Fleurbaey & Peter Hammond, 2004. "Interpersonally comparable utility," Post-Print hal-00247066, HAL.
    2. van Soest, Arthur & Das, Marcel & Gong, Xiaodong, 2002. "A structural labour supply model with flexible preferences," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 345-374, March.
    3. Khlat, Myriam & Sermet, Catherine & Le Pape, Annick, 2000. "Women's health in relation with their family and work roles: France in the early 1990s," Social Science & Medicine, Elsevier, vol. 50(12), pages 1807-1825, June.
    4. Marc Fleurbaey & Philippe Mongin, 2005. "The news of the death of welfare economics is greatly exaggerated," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 25(2), pages 381-418, December.
    5. Dolan, Paul, 1998. "The measurement of individual utility and social welfare," Journal of Health Economics, Elsevier, vol. 17(1), pages 39-52, January.
    6. Andrew M. Jones (ed.), 2006. "The Elgar Companion to Health Economics," Books, Edward Elgar Publishing, number 3572.
    7. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521887427, December.
    8. 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.
    9. Marc Fleurbaey, 2006. "Health, equity and social welfare," Annals of Economics and Statistics, GENES, issue 83-84, pages 21-59.
    10. Cam Donaldson & Stephen Birch & Amiram Gafni, 2002. "The distribution problem in economic evaluation: income and the valuation of costs and consequences of health care programmes," Health Economics, John Wiley & Sons, Ltd., vol. 11(1), pages 55-70, January.
    11. Johannesson, Magnus, 1999. "On aggregating QALYs: a comment on Dolan," Journal of Health Economics, Elsevier, vol. 18(3), pages 381-386, June.
    12. repec:dau:papers:123456789/266 is not listed on IDEAS
    13. Bleichrodt, Han, 1997. "Health utility indices and equity considerations," Journal of Health Economics, Elsevier, vol. 16(1), pages 65-91, February.
    14. Brouwer, Werner B. F. & Koopmanschap, Marc A., 2000. "On the economic foundations of CEA. Ladies and gentlemen, take your positions!," Journal of Health Economics, Elsevier, vol. 19(4), pages 439-459, July.
    15. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    16. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
    17. Donaldson, Cam, 1999. "Valuing the benefits of publicly-provided health care: does 'ability to pay' preclude the use of 'willingness to pay'?," Social Science & Medicine, Elsevier, vol. 49(4), pages 551-563, August.
    18. Marc Fleurbaey, 2005. "Health, Wealth, and Fairness," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 253-284, May.
    19. Abram Burk, 1938. "A Reformulation of Certain Aspects of Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 52(2), pages 310-334.
    20. Charles Blackorby & David Donaldson, 1990. "A Review Article: The Case against the Use of the Sum of Compensating Variations in Cost-Benefit Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 471-494, August.
    21. Jan Abel Olsen & Richard D. Smith, 2001. "Theory versus practice: a review of ‘willingness‐to‐pay’ in health and health care," Health Economics, John Wiley & Sons, Ltd., vol. 10(1), pages 39-52, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koen Decancq & Marc Fleurbaey & François Maniquet, 2019. "Multidimensional poverty measurement with individual preferences," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 29-49, March.
    2. J. P. Sevilla & Daniel Tortorice & David Kantor & John Regan & Kinga H. Meszaros & Ekkehard C. Beck & Najida Begum & David E. Bloom, 2024. "Lifecycle model-based evaluation of infant 4CMenB vaccination in the UK," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(7), pages 1133-1146, September.
    3. Nurmi, Väinö & Ahtiainen, Heini, 2018. "Distributional Weights in Environmental Valuation and Cost-benefit Analysis: Theory and Practice," Ecological Economics, Elsevier, vol. 150(C), pages 217-228.
    4. Victor Champonnois & Olivier Chanel, 2023. "Accounting for subsistence needs in non-market valuation: a simple proposal," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 66(5), pages 1037-1060, April.
    5. Victor Champonnois & Olivier Chanel, 2023. "Accounting for subsistence needs in non-market valuation: a simple proposal," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 66(5), pages 1037-1060, April.
    6. Sayaka Sakoda, 2022. "Estimating economic unfairness in Japan and policies toward fairness," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 85-111, February.
    7. Koen Decancq & Dirk Neumann, 2014. "Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data," SOEPpapers on Multidisciplinary Panel Data Research 717, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Richard Cookson & Ieva Skarda & Owen Cotton‐Barratt & Matthew Adler & Miqdad Asaria & Toby Ord, 2021. "Quality adjusted life years based on health and consumption: A summary wellbeing measure for cross‐sectoral economic evaluation," Health Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 70-85, January.
    9. C. Baunez & Mickael Degoulet & Stéphane Luchini & Patrick Pintus & Miriam Teschl, 2020. "Sub-National Allocation of COVID-19 Tests: An Efficiency Criterion with an Application to Italian Regions," Post-Print hal-03140005, HAL.
    10. Marko Ledić & Ivica Rubil, 2021. "Beyond Wage Gap, Towards Job Quality Gap: The Role of Inter-Group Differences in Wages, Non-Wage Job Dimensions, and Preferences," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(2), pages 523-561, June.
    11. Shun-ichiro Bessho & Masayoshi Hayashi, 2015. "Should the Japanese tax system be more progressive? An evaluation using the simulated SMCFs based on the discrete choice model of labor supply," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(1), pages 144-175, February.
    12. John E. Roemer & Alain Trannoy, 2013. "Equality of Opportunity," Cowles Foundation Discussion Papers 1921, Cowles Foundation for Research in Economics, Yale University.
    13. Andres Felipe Hoyos Martin, 2015. "Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes," Icesi Economics Working Papers 14570, Universidad Icesi.
    14. Luyten, Jeroen & Kessels, Roselinde & Atkins, Katherine E. & Jit, Mark & van Hoek, Albert Jan, 2019. "Quantifying the public's view on social value judgments in vaccine decision-making: A discrete choice experiment," Social Science & Medicine, Elsevier, vol. 228(C), pages 181-193.
    15. Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
    16. Dietrich, Stephan & Malerba, Daniele & Barrientos, Armando & Gassmann, Franziska, 2017. "Rates of return to antipoverty transfers in Uganda," MERIT Working Papers 2017-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Armando Barrientos & Stephan Dietrich & Franziska Gassmann & Daniele Malerba, 2022. "Prioritarian rates of return to antipoverty transfers," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 550-563, April.
    18. Brigitte Dormont & Anne-Laure Samson & Marc Fleurbaey & Stéphane Luchini & Erik Schokkaert, 2018. "Individual Uncertainty About Longevity," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1829-1854, October.
    19. C. Baunez & Mickael Degoulet & Stéphane Luchini & Patrick Pintus & Miriam Teschl, 2020. "Sub-National Allocation of COVID-19 Tests: An Efficiency Criterion with an Application to Italian Regions," Post-Print hal-03140005, HAL.
    20. Brown, Zachary Steven, 2022. "Distributional policy impacts, WTP-WTA disparities, and the Kaldor-Hicks tests in benefit-cost analysis," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    21. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    22. Matthew D. Adler, 2016. "Editor's Choice Benefit–Cost Analysis and Distributional Weights: An Overview," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 264-285.

    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. Nathalie Havet & Magali Morelle & Raphaël Remonnay & Marie-Odile Carrere, 2012. "Cancer patients’ willingness to pay for blood transfusions at home: results from a contingent valuation study in a French cancer network," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(3), pages 289-300, June.
    2. David Whynes & Emma Frew & Jane Wolstenholme, 2005. "Willingness-to-Pay and Demand Curves: A Comparison of Results Obtained Using Different Elicitation Formats," International Journal of Health Economics and Management, Springer, vol. 5(4), pages 369-386, December.
    3. Antoinette Baujard, 2016. "Welfare economics," Chapters, in: Gilbert Faccarello & Heinz D. Kurz (ed.), Handbook on the History of Economic Analysis Volume III, chapter 42, pages 611-624, Edward Elgar Publishing.
    4. repec:cup:judgdm:v:2:y:2007:i::p:96-106 is not listed on IDEAS
    5. Laura J. Damschroder & Peter A. Ubel & Jason Riis & Dylan M. Smith, 2007. "An alternative approach for eliciting willingness-to-pay: A randomized Internet trial," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 96-106, April.
    6. Fleurbaey, Marc, 2007. "Two criteria for social decisions," Journal of Economic Theory, Elsevier, vol. 134(1), pages 421-447, May.
    7. Brouwer, Werner B.F. & Culyer, Anthony J. & van Exel, N. Job A. & Rutten, Frans F.H., 2008. "Welfarism vs. extra-welfarism," Journal of Health Economics, Elsevier, vol. 27(2), pages 325-338, March.
    8. Alene Sze Jing Yong & Yi Heng Lim & Mark Wing Loong Cheong & Ednin Hamzah & Siew Li Teoh, 2022. "Willingness-to-pay for cancer treatment and outcome: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(6), pages 1037-1057, August.
    9. Hougaard, Jens Leth & Moreno-Ternero, Juan D. & Østerdal, Lars Peter, 2013. "A new axiomatic approach to the evaluation of population health," Journal of Health Economics, Elsevier, vol. 32(3), pages 515-523.
    10. Marc Fleurbaey & Philippe Mongin, 2005. "The news of the death of welfare economics is greatly exaggerated," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 25(2), pages 381-418, December.
    11. Marc Fleurbaey, 2007. "Social choice and the indexing dilemma," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(4), pages 633-648, December.
    12. Smith, Richard D. & Richardson, Jeff, 2005. "Can we estimate the `social' value of a QALY?: Four core issues to resolve," Health Policy, Elsevier, vol. 74(1), pages 77-84, September.
    13. Cawley, John, 2008. "Contingent valuation analysis of willingness to pay to reduce childhood obesity," Economics & Human Biology, Elsevier, vol. 6(2), pages 281-292, July.
    14. Fleurbaey, Marc, 2007. "Two criteria for social decisions," Journal of Economic Theory, Elsevier, vol. 134(1), pages 421-447, May.

    More about this item

    Keywords

    Economie quantitative;

    Statistics

    Access and download statistics

    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:hal:journl:hal-01499635. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.