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Would you rather be ill now, or later?

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  • Attema, AE
  • Versteegh, MM

Abstract

The Time Tradeoff (TTO) method is used to calculate the quality adjustment of the Quality Adjusted Life Year, and is therefore an important element in the calculation of the benefits of medical interventions. New specifications of TTO, known as ‘lead time’ TTO and ‘lag time’ TTO, have been developed to overcome methodological issues of the ‘classic’ TTO. In the lead time TTO, ill-health is explicitly placed in the future, after a period of good health, while in lag time TTO a health state starts immediately and is followed by a ‘lag time’ of good health. In this study, we take advantage of these timing properties of lead and lag time TTO. In particular, we use data from a previous study that employed lead and lag time TTO to estimate their implied discounting parameters. We show that individuals prefer being ill later, rather than now, with larger per-period discount rates for longer durations of the health states.

Suggested Citation

  • Attema, AE & Versteegh, MM, 2012. "Would you rather be ill now, or later?," MPRA Paper 37990, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37990
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    References listed on IDEAS

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    Cited by:

    1. Carrasco-Garcés, Moisés & Vásquez-Lavín, Felipe & Ponce Oliva, Roberto D. & Diaz Pincheira, Francisco & Barrientos, Manuel, 2021. "Estimating the implicit discount rate for new technology adoption of wood-burning stoves," Energy Policy, Elsevier, vol. 156(C).
    2. Stefan A. Lipman & Arthur E. Attema & Matthijs M. Versteegh, 2022. "Correcting for discounting and loss aversion in composite time trade‐off," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1633-1648, August.
    3. Vásquez-Lavín, Felipe & Carrasco, Moisés & Barrientos, Manuel & Gelcich, Stefan & Ponce Oliva, Roberto D., 2021. "Estimating discount rates for environmental goods: Are People’s responses inadequate to frequency of payments?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    4. Arthur Attema & Yvette Edelaar-Peeters & Matthijs Versteegh & Elly Stolk, 2013. "Time trade-off: one methodology, different methods," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 53-64, July.
    5. Vasquez-Lavín, Felipe & Ponce Oliva, Roberto D. & Hernández, José Ignacio & Gelcich, Stefan & Carrasco, Moisés & Quiroga, Miguel, 2019. "Exploring dual discount rates for ecosystem services: Evidence from a marine protected area network," Resource and Energy Economics, Elsevier, vol. 55(C), pages 63-80.

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    More about this item

    Keywords

    TTO; Time preference; discounting; lead time TTO; lag time TTO;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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