Valuing nonfatal health risk as a function of illness severity and duration: Benefit transfer using QALYs

Hammitt, James K. and Haninger, Kevin (2017) Valuing nonfatal health risk as a function of illness severity and duration: Benefit transfer using QALYs. Journal of Environmental Economics and Management, 82. pp. 17-38.

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Official URL: http://tse-fr.eu/pub/31396

Abstract

We estimate willingness to pay for small reductions in the risk of suffering nonfatal health conditions using a stated-preference survey fielded to an internet panel that is representative of the adult US population. Health conditions are described using a generic health utility system (EQ-5D). Estimated WTP is proportional to the stated reduction in probability of illness and independent of small differences in baseline risk, consistent with conventional economic theory, and is an increasing but highly concave function of the severity and duration of the illness. WTP to reduce nonfatal health risks can be estimated as a function of the severity and duration of the effect, but the relationship is not linear as assumed by the common practice of multiplying the expected QALY gain by a constant monetary value per QALY. WTP to reduce risk to another person in the household is significantly larger than to reduce risk to oneself, approximately 150 percent larger for an adult and 200 percent larger for a child.

Item Type: Article
Language: English
Date: March 2017
Refereed: Yes
Uncontrolled Keywords: QALY, WTP, Morbidity, Stated-preference
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 24 Jan 2017 10:10
Last Modified: 07 Mar 2018 13:24
OAI ID: oai:tse-fr.eu:31396
URI: http://publications.ut-capitole.fr/id/eprint/22769

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