The Value of Cancer Prevention vs Treatment

Hammitt, James K., Herrera-Araujo, Daniel and Rheinberger, Christoph (2016) The Value of Cancer Prevention vs Treatment. TSE Working Paper, n. 16-628, Toulouse

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Official URL: http://tse-fr.eu/pub/30267

Abstract

We present an integrated valuation model for diseases that pose some chance of death. The model extends the standard one-period value-of-statistical-life model to three health prospects: healthy, ill, and dead. We derive willingness-to-pay values for preven- tion eorts that reduce a disease’s incidence rate as well as for treatments that lower the corresponding health deterioration and mortality rates. We find that the demand value of prevention always exceeds that of treatment. People often overweight small risks and underweight large ones. We use the rank dependent utility framework to explore how the demand for prevention and treatment alters when people evaluate probabilities in a non-linear manner. For incidence and mortality rates associated with common types of cancers, the inverse-S shaped probability weighting found in experimental studies leads to a significant increment in the demand values of both treatment and prevention.

Item Type: Monograph (Working Paper)
Language: English
Date: February 2016
Place of Publication: Toulouse
JEL codes: D11 - Consumer Economics - Theory
D81 - Criteria for Decision-Making under Risk and Uncertainty
I10 - General
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Mar 2016 15:38
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:30267
URI: http://publications.ut-capitole.fr/id/eprint/19751

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