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The construction of standard gamble utilities

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  • Sylvie M. C. van Osch
  • Anne M. Stiggelbout

Abstract

Health effects for cost‐effectiveness analysis are best measured in life years, with quality of life in each life year expressed in terms of utilities. The standard gamble (SG) has been the gold standard for utility measurement. However, the biases of probability weighting, loss aversion, and scale compatibility have an inconclusive effect on SG utilities. We determined their effect on SG utilities using qualitative data to assess the reference point and the focus of attention. While thinking aloud, 45 healthy respondents provided SG utilities for six rheumatoid arthritis health states. Reference points, goals, and focuses of attention were coded. To assess the effect of scale compatibility, correlations were assessed between focus of attention and mean utility. The certain outcome served most frequently as reference point, the SG was perceived as a mixed gamble. Goals were mostly mentioned with respect to this outcome. Scale compatibility led to a significant upward bias in utilities; attention lay relatively more on the low outcome and this was positively correlated with mean utility. SG utilities should be corrected for loss aversion and probability weighting with the mixed correction formula proposed by prospect theory. Scale compatibility will likely still bias SG utilities, calling for research on a correction. Copyright © 2007 John Wiley & Sons, Ltd.

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  • Sylvie M. C. van Osch & Anne M. Stiggelbout, 2008. "The construction of standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 31-40, January.
    • Handle: RePEc:wly:hlthec:v:17:y:2008:i:1:p:31-40
    DOI: 10.1002/hec.1235
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    1. Attema, Arthur E. & Brouwer, Werner B.F. & l’Haridon, Olivier, 2013. "Prospect theory in the health domain: A quantitative assessment," Journal of Health Economics, Elsevier, vol. 32(6), pages 1057-1065.
    2. Aurélien Baillon & Han Bleichrodt & Vitalie Spinu, 2020. "Searching for the Reference Point," Management Science, INFORMS, vol. 66(1), pages 93-112, January.
    3. Stefan A. Lipman & Werner B.F. Brouwer & Arthur E. Attema, 2019. "QALYs without bias? Nonparametric correction of time trade‐off and standard gamble weights based on prospect theory," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 843-854, July.
    4. Goodwin, Elizabeth & Davey, Antoinette & Green, Colin & Hawton, Annie, 2021. "What drives differences in preferences for health states between patients and the public? A qualitative investigation of respondents’ thought processes," Social Science & Medicine, Elsevier, vol. 282(C).
    5. Lipman, Stefan A. & Brouwer, Werner B.F. & Attema, Arthur E., 2020. "Living up to expectations: Experimental tests of subjective life expectancy as reference point in time trade-off and standard gamble," Journal of Health Economics, Elsevier, vol. 71(C).
    6. Angela Robinson & Anne Spencer & Peter Moffatt, 2015. "A Framework for Estimating Health State Utility Values within a Discrete Choice Experiment," Medical Decision Making, , vol. 35(3), pages 341-350, April.
    7. Attema, Arthur E. & Brouwer, Werner B.F. & l’Haridon, Olivier & Pinto, Jose Luis, 2015. "Estimating sign-dependent societal preferences for quality of life," Journal of Health Economics, Elsevier, vol. 43(C), pages 229-243.
    8. Craig, Benjamin M. & Oppe, Mark, 2010. "From a different angle: A novel approach to health valuation," Social Science & Medicine, Elsevier, vol. 70(2), pages 169-174, January.
    9. Earl, Peter E. & Friesen, Lana & Shadforth, Christopher, 2019. "Elusive optima: A process tracing analysis of procedural rationality in mobile phone connection plan choices," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 303-322.
    10. Denise Bijlenga & Gouke J. Bonsel & Erwin Birnie, 2011. "Eliciting willingness to pay in obstetrics: comparing a direct and an indirect valuation method for complex health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 20(11), pages 1392-1406, November.

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