Social Time Preferences for Health and Money Elicited with a Choice Experiment

Abstract

Objectives In economic evaluations future health and monetary outcomes are commonly discounted at equal and constant rates. The theoretical foundation of this practice is being debated and appropriate discount rates for costs and health effects are sought. Here, we have derived social discount rates for health, money, and environmental benefits by means of a choice experiment. Methods All choices were framed from a social perspective. We investigated differences in time preference by domain (health, monetary benefits, environmental benefits), time delay (5, 10, and 40 years), and respondent characteristics. Respondents were 173 health-care professionals and 34 health policymakers. Choice titration was used to determine when the respondent was indifferent between future and present benefits. Results At least two-thirds of respondents preferred an intervention with immediate benefits to delayed benefits in the different domains. The median (mean) yearly discount rates for health benefits were 2.7% (10.7%), 1.3% (3.5%), and 1.1% (2.3%) assuming a 5, 10, and 40 years delay, respectively. Social time preference for monetary benefits was significantly stronger, with median (mean) yearly discount rates of 6.6% (18.7%) and 4.8% (11.2%) assuming a 5 and 10 years delay, respectively. The social time preference with regard to environmental benefits was similar to the monetary benefits. Social time preference for the different domains was significantly correlated at the individual level. Conclusions The empirically derived social time preference is in line with current theoretical arguments for a lower discount rate for health benefits than for monetary benefits. Moreover, the implied median discount rates for health were lower than those commonly used or advocated in guidelines.