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Published on: September 16, 2022
Multivariate risk preferences in the quality-adjusted life year model
Arthur E Attema1, Jona J Frasch1, Olivier L'Haridon2
1Erasmus Centre for Health Economics Rotterdam (EsCHER), Erasmus School of Health Policy & Management, Erasmus University Rotterdam, Rotterdam, The Netherlands.
This study measures health risk preferences for quality of life and longevity. Higher-order risk preferences for health are stronger than for money, suggesting broader QALY model application.
Area of Science:
- Health economics
- Decision analysis
- Behavioral economics
Background:
- Growing interest in multivariate and higher-order risk preferences.
- Limited evidence on these preferences specifically for health outcomes.
- Quality-Adjusted Life Year (QALY) model uses quality of life and longevity.
Purpose of the Study:
- To measure multivariate and higher-order risk preferences for quality of life and longevity.
- To investigate the relationship between risk preferences for different health attributes.
- To assess the robustness of the QALY model under various risk scenarios.
Main Methods:
- Empirical measurement of multivariate and higher-order risk preferences.
- Analysis of preferences for correlations and pooling of risks in quality of life and longevity.
- Testing the influence of life expectancy on risk preferences for quality of life treatments.
Main Results:
- Observed preferences for positive correlation between quality of life and longevity.
- Evidence of pooling preferences for risks in both attributes.
- Higher-order risk preferences are stronger for health than for money.
- No direct link between QoL treatment risk and life expectancy, but comorbidity risk affects QoL treatment risk aversion.
- QALY model is more robust with higher expected longevity.
Conclusions:
- Health risk preferences, including higher-order ones, differ from monetary preferences.
- The QALY model's robustness is influenced by expected longevity.
- Cost-effectiveness analysis should incorporate risk aversion for quality of life and longevity, and higher-order preferences.
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