Living up to expectations: Experimental tests of subjective life expectancy as reference point in time trade-off and standard gamble

Stefan A Lipman,Werner B.F Brouwer,Arthur E Attema

doi:10.1016/j.jhealeco.2020.102318

Stefan A Lipman, Werner B.F Brouwer + Show 1 more

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https://doi.org/10.1016/j.jhealeco.2020.102318

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Journal: Journal of Health Economics	Publication Date: Mar 27, 2020
Citations: 12	License type: cc-by

Affiliation: Erasmus University Rotterdam

Abstract

Earlier work suggested that subjective life expectancy (SLE) functions as reference point in time trade-off (TTO), but has not tested or modelled this explicitly. In this paper we construct a model based on prospect theory to investigate these predictions more thoroughly. We report the first experimental test of reference-dependence with respect to SLE for TTO and extend this approach to standard gamble (SG). In two experiments, subjects’ SLEs were used to construct different versions of 10-year TTO and SG tasks, with the gauge duration either described as occurring above or below life expectation. Our analyses suggest that both TTO and SG weights were affected by SLE as predicted by prospect theory with SLE as reference point. Subjects gave up fewer years in TTO and were less risk-tolerant in SG below SLE, implying that weights derived from these health state valuation methods for durations below SLE will be biased upwards.

Highlights

Time trade-off (TTO) and standard gamble (SG) are two popular methods to value health states, i.e. to obtain utility weights relevant for determining quality adjusted life-years (QALYs).1 the methods share a similar purpose, their framing and outcomes differ substantially (Bleichrodt and Johannesson, 1997; Bleichrodt, 2002), with SG weights typically being higher than time trade-off (TTO) weightsPlease cite this article in press as: S.A
As we restricted our theoretical analyses to health states considered acceptable, we determined if students deemed health states Q1, Q2 and Q3 acceptable at all ages used in implemented TTO or SG versions
Future work could explore whether this lack of counterbalancing between-subjects could have affected our conclusions, other authors find no effects of order on gain-loss framing (e.g. De Dreu et al, 1994). Whereas it is well-known that TTO and SG weights are typically different (e.g. Read et al, 1984; Torrance, 1976), earlier work on the role of subjective life expectancy (SLE) has exclusively focused on TTO

Summary

Introduction

Time trade-off (TTO) and standard gamble (SG) are two popular methods to value health states, i.e. to obtain utility weights relevant for determining quality adjusted life-years (QALYs). the methods share a similar purpose, their framing and outcomes differ substantially (Bleichrodt and Johannesson, 1997; Bleichrodt, 2002), with SG weights typically being higher than TTO weightsPlease cite this article in press as: S.A. Time trade-off (TTO) and standard gamble (SG) are two popular methods to value health states, i.e. to obtain utility weights relevant for determining quality adjusted life-years (QALYs).. The methods share a similar purpose, their framing and outcomes differ substantially (Bleichrodt and Johannesson, 1997; Bleichrodt, 2002), with SG weights typically being higher than TTO weights. Please cite this article in press as: S.A. Lipman, W.B.F. Brouwer and A.E. Attema, Living up to expectations: Experimental tests of subjective life expectancy as reference point in time trade-off and standard gamble.

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