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Exponential Health Utility: A Characterization and Comments on a Paper by Happich and Mühlbacher

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  • Lars Peter Østerdal

    (Institute of Economics, University of Copenhagen)

Abstract

In a recent paper Happich and Mühlbacher [Eur J Health Econom (2003) 4:292-294] proposed an axiom of constant absolute trade-off in life years, and studied the family of QALY models satisfying this axiom under expected utility and mutual utility independence between life years and health state. In this paper, we provide a complete characterization of the above-mentioned family of QALY models. This family should not be mistaken for the family of multiplicative expo-nential QALY models; in particular, it violates the zero-condition.

Suggested Citation

  • Lars Peter Østerdal, 2004. "Exponential Health Utility: A Characterization and Comments on a Paper by Happich and Mühlbacher," Discussion Papers 04-04, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0404
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2004/0404.pdf/
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    References listed on IDEAS

    as
    1. Michael Happich & Axel Muehlbacher, 2003. "An exponential representation of health state utility," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 4(4), pages 292-294, December.
    2. Joseph S. Pliskin & Donald S. Shepard & Milton C. Weinstein, 1980. "Utility Functions for Life Years and Health Status," Operations Research, INFORMS, vol. 28(1), pages 206-224, February.
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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • I10 - Health, Education, and Welfare - - Health - - - General

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