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Testing the Predictive Validity of the Time Trade-Off and the Standard Gamble

Author

Listed:
  • JOSE MARIA ABELLAN-PERPIÑAN

    (Departmento de Economia Aplicada, Universidad de Murcia)

  • Han Bleichrodt

    (Department of Economics & iMTA/iBMG, Erasmus University)

  • Jose Luis Pinto-Prades

    (Departament of Economics, Universidad Pablo de Olavide)

Abstract

This paper tests the consistency of health utility measurements with individual preferences. We compare three methods, the time trade-off, the standard gamble and a version of the standard gamble that corrects for the deviations from expected utility modeled by prospect theory. Individual preferences are measured both through a ranking task and through a choice task. In decisions involving no risk the time trade-off is most consistent with people’s preferences with the standard gamble a close second. In decisions involving risk the corrected standard gamble is most consistent with people’s preferences. Our data do not support the common assumption in health economics that utility is transferable across decision contexts.

Suggested Citation

  • JOSE MARIA ABELLAN-PERPIÑAN & Han Bleichrodt & Jose Luis Pinto-Prades, 2007. "Testing the Predictive Validity of the Time Trade-Off and the Standard Gamble," Working Papers 07.17, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:07.17
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    Cited by:

    1. Oscar Andrés Espinosa Acuna, 2020. "Clasificación de estados de salud y metodologías de valoración de preferencias para el cálculo de AVAC: una revisión de literatura," Ensayos de Economía 19137, Universidad Nacional de Colombia Sede Medellín.
    2. Jose Mª Abellán Perpiñán & Fernando Ignacio Sánchez Martínez & Jorge Eduardo Martínez Pérez & Ildefonso Méndez Martínez, 2009. "The QALY model wich came in from a general population survey: roughly multiplicative, broadly nonlinear and sometimes contex-dependt," Economic Working Papers at Centro de Estudios Andaluces E2009/04, Centro de Estudios Andaluces.
    3. Attema, Arthur E. & Brouwer, Werner B.F., 2009. "The correction of TTO-scores for utility curvature using a risk-free utility elicitation method," Journal of Health Economics, Elsevier, vol. 28(1), pages 234-243, January.

    More about this item

    Keywords

    Health utility measurement; QALYs; standard gamble; time trade-off; prospect theory.;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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