Monetary valuation of illnesses in Costa Rica: a subjective well-being approach

This report aims to 1) explain and illustrate the use of the subjective well-being (SWB) approach as an alternative health-valuation methodology by estimating the monetary value of five general categories of illness in Costa Rica, and 2) foster comparative research on the advantages and limitations of alternative approaches to health valuation.

Use of the SWB valuation approach to measure the monetary value of illness (MVI), based on empirical data from a representative survey in Costa Rica carried out in 2004. The MVI is defined as the estimated percentage of monthly income that would be required to compensate for the loss in life satisfaction (LS)--a primary SWB conception-that is expected to occur with the onset of illness. The five general categories of illnesses studied were cancer, cardiovascular disease, thyroid disease, arthritis, and infectious disease.

There was wide disparity in the monetary values of the different illnesses. Some illnesses had relatively high monetary value compared to persons' mean income, indicating the high value of good health and of programs that aim to prevent the emergence of illnesses or abate their negative impact on people's well-being.

The SWB valuation approach can be used to estimate illnesses' monetary value and thus can contribute to the design of health policies related to resource allocation and compensation, and revenue-generating schemes.