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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 - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)

  • Christophe Muller

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

  • 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
    Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01499635
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    References listed on IDEAS

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    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, February.
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    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.
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    9. 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.
    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. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
    12. 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.
    13. Marc Fleurbaey, 2005. "Health, wealth and fairness," Post-Print hal-00247025, HAL.
    14. Johannesson, Magnus, 1999. "On aggregating QALYs: a comment on Dolan," Journal of Health Economics, Elsevier, vol. 18(3), pages 381-386, June.
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    16. Marc Fleurbaey, 2005. "Health, Wealth, and Fairness," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 253-284, May.
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    Cited by:

    1. 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.
    2. 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.
    3. Decancq, Koen & Neumann, Dirk, 2014. "Does the Choice of Well-Being Measure Matter Empirically? An Illustration with German Data," IZA Discussion Papers 8589, Institute of Labor Economics (IZA).
    4. 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.
    5. 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).
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. Andres Felipe Hoyos Martin, 2015. "Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes," Icesi Economics Working Papers 014570, Universidad Icesi.
    12. Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
    13. 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.
    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.

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