IDEAS home Printed from https://ideas.repec.org/p/hhs/kaunek/0002.html
   My bibliography  Save this paper

The Willingness to Pay for a QALY - Results based on value of statistical life estimates in Sweden

Author

Listed:
  • Svensson, Mikael

    (Dept. of Economics)

  • Hultkrantz, Lars

    (Örebro University)

Abstract

As the use of cost-effectiveness analysis with quality adjusted life years (QALY) as the outcome measure grows in policy use, a major unresolved issue is that of the monetary value to place on a QALY. This paper addresses this issue by estimating and discussing willingness to pay (WTP) estimates for a QALY in Sweden This paper uses all published estimates of the value of a statistical life since the year 2000, based on a Swedish population, to implicitly derive the WTP for a QALY. Based on 16 recently published estimates of the value of a statistical life (year 2000 or later) in Sweden, 11 papers explicitly stating that they estimate policy values of VSL are used to estimate the WTP for a QALY. Estimates range from 750,000 to 3,200,000 Swedish kronor (approx. €80,000 to €350,000) assuming a discount rate of 3%. Using the current government-recommended estimate of value of a statistical life produces a value of approx. 1.2 million Swedish kronor (€130,000) per QALY. There is significant variance in the WTP for a QALY based on conversions from value of statistical life estimates in Sweden. Still, using a discount rate of 3%, the range of estimates in this paper is higher compared to the current informal “thresholds” as discussed by Swedish government authorities.

Suggested Citation

  • Svensson, Mikael & Hultkrantz, Lars, 2012. "The Willingness to Pay for a QALY - Results based on value of statistical life estimates in Sweden," Karlstad University Working Papers in Economics 2, Karlstad University, Department of Economics.
    • Handle: RePEc:hhs:kaunek:0002
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Pinto-Prades, Jose Luis & Loomes, Graham & Brey, Raul, 2009. "Trying to estimate a monetary value for the QALY," Journal of Health Economics, Elsevier, vol. 28(3), pages 553-562, May.
    2. Corso, Phaedra S & Hammitt, James K & Graham, John D, 2001. "Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 165-184, September.
    3. Hammitt, James K & Graham, John D, 1999. "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 33-62, April.
    4. Rosen, Sherwin, 1988. "The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, Springer, vol. 1(3), pages 285-304, September.
    5. Dorte Gyrd‐Hansen, 2003. "Willingness to pay for a QALY," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 1049-1060, December.
    6. Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
    7. Richard A. Hirth & Michael E. Chernew & Edward Miller & A. Mark Fendrick & William G. Weissert, 2000. "Willingness to Pay for a Quality-adjusted Life Year," Medical Decision Making, , vol. 20(3), pages 332-342, July.
    8. Bleichrodt, Han & Wakker, Peter & Johannesson, Magnus, 1997. "Characterizing QALYs by Risk Neutrality," Journal of Risk and Uncertainty, Springer, vol. 15(2), pages 107-114, November.
    9. Takeru Shiroiwa & Yoon‐Kyoung Sung & Takashi Fukuda & Hui‐Chu Lang & Sang‐Cheol Bae & Kiichiro Tsutani, 2010. "International survey on willingness‐to‐pay (WTP) for one additional QALY gained: what is the threshold of cost effectiveness?," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 422-437, April.
    10. Arianne de Blaeij & Raymond J.G.M. Florax & Piet Rietveld & Erik T. Verhoef, 2000. "The Value of Statistical Life in Road Safety: A Meta-Analysis," Tinbergen Institute Discussion Papers 00-089/3, Tinbergen Institute.
    11. Jones-Lee, Michael W, 1974. "The Value of Changes in the Probability of Death or Injury," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 835-849, July/Aug..
    12. Hultkrantz, Lars & Svensson, Mikael, 2012. "The value of a statistical life in Sweden: A review of the empirical literature," Health Policy, Elsevier, vol. 108(2), pages 302-310.
    13. Fredrik Carlsson & Dinky Daruvala & Henrik Jaldell, 2010. "Value of Statistical Life and Cause of Accident: A Choice Experiment," Risk Analysis, John Wiley & Sons, vol. 30(6), pages 975-986, June.
    14. Milton C. Weinstein & Donald S. Shepard & Joseph S. Pliskin, 1980. "The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 373-396.
    15. 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.
    16. Nancy Devlin & David Parkin, 2004. "Does NICE have a cost‐effectiveness threshold and what other factors influence its decisions? A binary choice analysis," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 437-452, May.
    17. Helen Mason & Michael Jones‐Lee & Cam Donaldson, 2009. "Modelling the monetary value of a QALY: a new approach based on UK data," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 933-950, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henrik Andersson & James K. Hammitt & Kristian Sundström, 2015. "Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 727-752, September.
    2. Ryen, Linda & Svensson, Mikael, 2014. "The Willingness to Pay for a QALY: a Review of the Empirical Literature," Karlstad University Working Papers in Economics 12, Karlstad University, Department of Economics.
    3. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 17, Edward Elgar Publishing.
    4. Hultkrantz, Lars & Svensson, Mikael, 2012. "The value of a statistical life in Sweden: A review of the empirical literature," Health Policy, Elsevier, vol. 108(2), pages 302-310.
    5. Andersson, Henrik, 2013. "Consistency in preferences for road safety: An analysis of precautionary and stated behavior," Research in Transportation Economics, Elsevier, vol. 43(1), pages 41-49.
    6. James Hammitt, 2013. "Admissible utility functions for health, longevity, and wealth: integrating monetary and life-year measures," Journal of Risk and Uncertainty, Springer, vol. 47(3), pages 311-325, December.
    7. S. Olofsson & U.-G. Gerdtham & L. Hultkrantz & U. Persson, 2019. "Value of a QALY and VSI estimated with the chained approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1063-1077, September.
    8. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    9. Kevin Haninger & James K. Hammitt, 2011. "Diminishing Willingness to Pay per Quality‐Adjusted Life Year: Valuing Acute Foodborne Illness," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1363-1380, September.
    10. Linda Ryen & Mikael Svensson, 2015. "The Willingness to Pay for a Quality Adjusted Life Year: A Review of the Empirical Literature," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1289-1301, October.
    11. Christian R. C. Kouakou & Thomas G. Poder, 2022. "Willingness to pay for a quality-adjusted life year: a systematic review with meta-regression," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(2), pages 277-299, March.
    12. Henrik Andersson & Mikael Svensson, 2008. "Cognitive ability and scale bias in the contingent valuation method," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(4), pages 481-495, April.
    13. Andersson, Henrik, 2006. "Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study," Working Papers 2006:5, Swedish National Road & Transport Research Institute (VTI).
    14. James Hammitt & Jin-Tan Liu, 2004. "Effects of Disease Type and Latency on the Value of Mortality Risk," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 73-95, January.
    15. Arthur E. Attema & Marieke Krol & Job Exel & Werner B. F. Brouwer, 2018. "New findings from the time trade-off for income approach to elicit willingness to pay for a quality adjusted life year," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(2), pages 277-291, March.
    16. Olofsson, Sara & Gerdtham , Ulf-G & Hultkrantz , Lars & Persson , Ulf, 2016. "Chained Approach vs Contingent Valuation for Estimating the Value of Risk Reduction," Working Papers 2016:34, Lund University, Department of Economics.
    17. Andersson, Henrik & Hole, Arne Risa & Svensson, Mikael, 2016. "Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 41-53.
    18. James K. Hammitt, 2002. "QALYs Versus WTP," Risk Analysis, John Wiley & Sons, vol. 22(5), pages 985-1001, October.
    19. Henrik Andersson, 2008. "Willingness to Pay for Car Safety: Evidence from Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 579-594, December.
    20. Hammitt, James & Haninger, Kevin, 2011. "Valuing Morbidity Risk: Willingness to Pay per Quality-Adjusted Life Year," LERNA Working Papers 11.09.343, LERNA, University of Toulouse.

    More about this item

    Keywords

    QALY; Willingness to pay; Value of a statistical life; Contingent Valuation;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:kaunek:0002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Niklas Jakobsson (email available below). General contact details of provider: https://edirc.repec.org/data/eikause.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.