Chapter 6 - Research needs

Abstract

Considerable research on the value of statistical life (VSL) and life quality, in particular, quality adjusted life year (QALY) and disability adjusted life year (DALY) has been carried out over the years. However, there are many areas in these broad topics where more research is needed. As far as VSL is concerned, the effect of age on its value appears to be changing, with the longer life expectancy of people and general increase in accumulated wealth, the VSL based on WTP for the elderly may not be as small as previously thought. Similarly, for younger age groups, the VSL is shown to be low. Some studies explain this as being due to young people considering their risk of death to be relatively low. So where the value per QALY is estimated from the VSL, the estimation process considers VSL only above the median age group responses. The monetary value per QALY could vary by age. Some further research is needed to find the nature of monetary value per QALY–whether it remains constant or varies by age or other attributes. Like variation by age, the monetary value per QALY may also vary by the size of QALY gained. Linked to this is the fact that future QALYs can only be gained only if a person survives the present period. The average survival probability at each age group can be worked out and that may help determine the effective discount rate to determine the value of future QALYs. The discount rate used for valuing resources may not be appropriate for valuing future QALYs.