Private and social time preference for health outcomes: A general population survey in Iran.

Alireza Mahboub-Ahari,Abolghasem Pourreza,Trevor A Sheldon,Ali Akbari Sari,Maryam Moeeni

doi:10.1371/journal.pone.0211545

Abstract

Despite the recent increase in economic evaluations of health care programs in low and middle income countries, there is still a surprising gap in evidence on the appropriate discount rate and the discounting of health outcomes such as quality adjusted life years (QALYs). Our study aimed to calculate the implied time preference rate for health outcomes in Iran and its key determinants. Data were gathered from one family member from each of the 650 households randomly selected in Tehran. The respondents’ private and social preferences for health outcomes were calculated using the time trade-off (TTO) technique based on the discounted utility model. We investigated the main assumptions of the discounted utility model through equality of mean comparison, and the association between private time preference and key socio-economic determinants using multilevel regression analysis. The mean and median implied rates were 5.8% and 4.9% for private time preference and 25.6% and 20% for social time preference respectively. Our study confirmed that magnitude, framing and time effects have a significant impact on implied discount rates, which means that the conventional discounted utility model’s main assumptions are violated in the Iranian general population. Other models of discounting which apply lower rates for far health outcomes might provide a more sensible solution to discounting health interventions with long-term impacts.

Highlights

The choice of discount rate as well as the practice of discounting health outcomes influences the decision-making process when informed by an economic evaluation [1, 2]
We aimed to answer three questions: 1) what are the implied private and social time preference rates for health outcomes in the Iranian general population 2) how do implied time preference rates vary across different scenarios and socio-economic characteristics of the population, and 3) which discounting practice is appropriate for Iran?
The mean implied time preference rate for private health outcomes was estimated as 5.8% while the rate estimated by previous studies which were mostly conducted in high income countries ranged from 1% to 46%

Summary

Introduction

The choice of discount rate as well as the practice of discounting health outcomes influences the decision-making process when informed by an economic evaluation [1, 2]. Despite the relative abundance of published studies about discount rate estimation and discounting practice in high income countries (HICs), [3] there is a significant paucity of literature in this regard in low and middle income countries (LMICs), with respect to health outcomes. Private and social time preference for health outcomes. The choice of appropriate discount rates for LMICs is challenging due to greater market imperfections, varying inter-generational weighting and values, political instability and cultural factors [7, 8]

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Discussion

Conclusion