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Interpretations Of Utility And Their Implications For The Valuation Of Health

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Paul Dolan
Daniel Kahneman

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Abstract

The term 'utility' can be interpreted in terms of the hedonic experience of an outcome (experienced utility) or in terms of the preference or desire for that outcome (decision utility). It is this second interpretation that lies at the heart of the methods that economists have developed to value non-market goods, such as health. In this article, we argue that decision utility is unlikely to generate meaningful data on the utility associated with different experiences, and instead economists should look towards developing measures that focus more directly on experienced utility. Copyright 2008 The Author(s). Journal compilation Royal Economic Society 2008.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2007.02110.x
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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 118 (2008)
Issue (Month): 525 (01)
Pages: 215-234
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Handle: RePEc:ecj:econjl:v:118:y:2008:i:525:p:215-234

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  1. Nattavudh Powdthavee, . "Jobless, Friendless, and Broke: What Happens to Different Areas of Life Before and After Unemployment?," Discussion Papers 09/15, Department of Economics, University of York. [Downloadable!]
  2. Paul Dolan & Robert Metcalfe, 2008. "Comparing Willingness-to-Pay and Subjective Well-Being in the Context of Non-Market Goods," CEP Discussion Papers dp0890, Centre for Economic Performance, LSE. [Downloadable!]
  3. Carol Graham & Lucas Higuera & Eduardo Lora, 2009. "Valuing Health Conditions - Insights from Happiness Surveys across Countries and Cultures," RES Working Papers 4635, Inter-American Development Bank, Research Department. [Downloadable!]
  4. Azomahou, Theophile & Diene, Bity & Soete, Luc, 2009. "The role of consumption and the financing of health investment under epidemic shocks," UNU-MERIT Working Paper Series 006, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  5. Andreas Knabe & Steffen Rätzel & Ronnie Schöb & Joachim Weimann, 2009. "Dissatisfied with Life, but Having a Good Day: Time-Use and Well-Being of the Unemployed," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  6. Pouliakas, Konstantinos & Theodossiou, Ioannis, 2008. "Measuring the Utility Cost of Temporary Employment Contracts before Adaptation: A Conjoint Analysis Approach," MPRA Paper 14166, University Library of Munich, Germany. [Downloadable!]
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