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Quality adjusted life years based on health and consumption: a summary wellbeing measure for cross‐sectoral economic evaluation

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  • Cookson, Richard
  • Skarda, Ieva
  • Cotton-Barratt, Owen
  • Adler, Matthew
  • Asaria, Miqdad
  • Ord, Toby

Abstract

We introduce a summary wellbeing measure for economic evaluation of cross‐sectoral public policies with impacts on health and living standards. We show how to calculate period‐specific and lifetime wellbeing using quality‐adjusted life years based on widely available data on health‐related quality of life and consumption and normative assumptions about three parameters—minimal consumption, standard consumption, and the elasticity of the marginal value of consumption. We also illustrate how these three parameters can be tailored to the decision‐making context and varied in sensitivity analysis to provide information about the implications of alternative value judgments. As well as providing a general measure for cost‐effectiveness analysis and cost‐benefit analysis in terms of wellbeing, this approach also facilitates distributional analysis in terms of how many good years different population subgroups can expect to live under different policy scenarios.

Suggested Citation

  • Cookson, Richard & Skarda, Ieva & Cotton-Barratt, Owen & Adler, Matthew & Asaria, Miqdad & Ord, Toby, 2021. "Quality adjusted life years based on health and consumption: a summary wellbeing measure for cross‐sectoral economic evaluation," LSE Research Online Documents on Economics 107065, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:107065
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 4th January 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-01-04 12:00:05

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    Cited by:

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    2. Da Costa, Shaun & O’Donnell, Owen & Van Gestel, Raf, 2024. "Distributionally sensitive measurement and valuation of population health," Journal of Health Economics, Elsevier, vol. 93(C).
    3. Shaun Da Costa & Owen O'Donnell & Raf Van Gestel, 2023. "Distributionally Sensitive Measurement and Valuation of Population Health," Tinbergen Institute Discussion Papers 23-017/V, Tinbergen Institute.

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    More about this item

    Keywords

    cost effective; health; QALY; quality of life; wellbeing;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General

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