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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 - 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
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    References listed on IDEAS

    as
    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, September.
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    7. 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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    13. 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.
    14. 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.
    15. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
    16. 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.
    17. Marc Fleurbaey, 2005. "Health, Wealth, and Fairness," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 253-284, May.
    18. 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.
    19. 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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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. Andres Felipe Hoyos Martin, 2015. "Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes," Icesi Economics Working Papers 14570, Universidad Icesi.
    6. Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
    7. 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).
    8. 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.
    9. 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).
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. 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).
    15. John E. Roemer & Alain Trannoy, 2013. "Equality of Opportunity," Cowles Foundation Discussion Papers 1921, Cowles Foundation for Research in Economics, Yale University.
    16. 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.
    17. 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.
    18. 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.
    19. 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.
    20. 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.

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