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A semi-separable utility function for health profiles.

Ana M Guerrero1, Carmen Herrero

  • 1Department of Economics, Universidad Carlos III de Madrid, Madrid, Spain.

Journal of Health Economics
|December 25, 2004
PubMed
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This study introduces a new semi-separable utility function for health profiles, offering a more flexible approach than existing models. This method aids in evaluating healthcare programs using cost-utility analysis.

Area of Science:

  • Decision analysis
  • Health economics
  • Utility theory

Background:

  • Individual preferences over health lotteries are typically modeled using multiplicative or additive utility functions.
  • Existing models rely on strong assumptions of mutual utility independence or additive independence.

Purpose of the Study:

  • To derive a semi-separable utility function under a weaker condition of initial independence.
  • To assess the parameters of this new utility function using the Standard Gamble procedure.
  • To provide a tool for cost-utility analysis in healthcare program evaluation.

Main Methods:

  • Imposed utility independence with respect to initial health states (initial independence).
  • Derived a semi-separable utility function based on this weaker condition.

Related Experiment Videos

  • Assessed the function's parameters using the Standard Gamble procedure.

    • Main Results:

    • A novel semi-separable utility function was derived under initial independence.
    • The parameters of this function were successfully estimated via the Standard Gamble method.

    Conclusions:

    • The derived semi-separable utility function offers a more flexible alternative to existing models.
    • This approach can enhance the accuracy and applicability of cost-utility analyses for healthcare interventions.