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The effect of discounting on quality of life valuation using the Time Trade-Off, CHERE Working Paper 2008/3

Author

Listed:
  • Richard Norman

    (CHERE, University of Technology, Sydney)

  • Rosalie Viney

    (CHERE, University of Technology, Sydney)

Abstract

Cost-utility analysis, combining mortality effects with health-related quality of life effects, has become the preferred method for presenting economic evaluation. It allows comparability between potential investments in different areas of health and healthcare as the outcomes are generic and designed to be applicable in multiple contexts. There are various methods for estimating health-related quality of life scores but one major approach is the use of the Time Trade-Off. Evidence has suggested that scores from this measure are relatively lower than from other measures. We argue that one possible reason for this is that the TTO method artificially deflates valuation scores because it does not take account of time preference. The extent of the deflation depends on the duration of survival offered for the health state in question, the true valuation placed on that state, and the individual?s rate of time preference. This has implications for the use of TTO valuation scores in economic evaluation, particularly when models are populated using health-related quality of life scores from sources using different methods.

Suggested Citation

  • Richard Norman & Rosalie Viney, 2008. "The effect of discounting on quality of life valuation using the Time Trade-Off, CHERE Working Paper 2008/3," Working Papers 2008/3, CHERE, University of Technology, Sydney.
    • Handle: RePEc:her:chewps:2008/3
    as

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    File URL: http://www.chere.uts.edu.au/pdf/wp2008_3.pdf
    File Function: First version, June 2008
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    References listed on IDEAS

    as
    1. Theodore G. Ganiats & Richard T. Carson & Robert M. Hamm & Scott B. Cantor & Walton Sumner & Stephen J. Spann & Michael D. Hagen & Christopher Miller, 2000. "Population-based Time Preferences for Future Health Outcomes," Medical Decision Making, , vol. 20(3), pages 263-270, July.
    2. Richard Norman & Paula Cronin & Rosalie Viney & Madeleine King & Deborah Street & John Brazier & Julie Ratcliffe, 2007. "Valuing EQ-5D health states: A review and analysis, CHERE Working Paper 2007/9," Working Papers 2007/9, CHERE, University of Technology, Sydney.
    3. Anne Spencer, 2003. "The TTO method and procedural invariance," Health Economics, John Wiley & Sons, Ltd., vol. 12(8), pages 655-668, August.
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    More about this item

    Keywords

    health related quality of life; time trade off;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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