Eliciting discounting model and direction at the individual level with time trade-off follow-up questions

Time preference is increasingly considered in health state valuation. As its inclusion impacts the produced value sets, it is important to account for it using the correct specification. Various discounting functions have been used, and both directions of time preference have been identified. I aimed to extend the composite time-trade off task (composite TTO, cTTO) by follow-up questions (TTOFUs) to identify the discounting function and direction for individual respondents.

Respondents completed cTTO tasks for 6 EQ-5D-5L health states. If utility exceeded 0.1, three TTOFUs (Q1-Q3) were posed. Each TTOFU modified the indifference-yielding alternative by halving durations (Q1) or adding a 5-year lead-time in full health (Q2) or a 5-year lag-time in the valued state (Q3). As shown in the paper, the pattern of Q1-Q3 answers unambiguously discerns the discounting function (exponential, power, or hyperbolic) and direction.

Data from 148 respondents, 16 health states, and 577 respondent-state pairs were analysed. Only 20.4% of pairs yielded theoretically-plausible patterns, and among those 60% imply no time preference. For Q2 and Q3, responses mostly implied negative ([Formula: see text]) and positive ([Formula: see text]) time preference, respectively. Majority-rule pooling within respondents produced a pattern not matching the considered discounting models but that can arise when quality-of-life and longevity are combined additively, not multiplicatively as in the quality-adjusted life years (QALY) model.

Standard discounting models poorly fit observed choices in TTO-like questions. The discounting parameters measured in other studies may be driven by other phenomena, including departures from the QALY model. Hence, careful interpretation of estimated parameters is warranted, and future studies are recommended.