Putting Different Price Tags on the Same Health Condition: Re-Evaluating the Well-Being Valuation Approach

33 Pages Posted: 21 Feb 2011

Abstract

Many recent writings in health policy have proposed that health be valued directly and in monetary terms using the new well-being valuation method. Yet there is currently no clear consensus on what the best measure of individualï¾’s experience may be for the evaluation process. To shed light on this issue, monetary values for a number of health problems are compared across different well-being measures within the same UK data set. We find that, while there is strong internal consistency of health impacts within each well-being measure, hugely different monetary valuations are obtained for the same health problem across different well-being measures. Our results, although should only viewed as illustrative, call for economists to rethink about which measure of well-being or experienced utility to be used in the well-being valuation method, should the approach ever be implemented in real policy contexts.

Keywords: well-being, compensation variations, monetary valuations, happiness, health, GHQ

JEL Classification: H8, I18, I31

Suggested Citation

Powdthavee, Nattavudh and van den Berg, Bernard, Putting Different Price Tags on the Same Health Condition: Re-Evaluating the Well-Being Valuation Approach. IZA Discussion Paper No. 5493, Available at SSRN: https://ssrn.com/abstract=1765659 or http://dx.doi.org/10.2139/ssrn.1765659

Nattavudh Powdthavee (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom
+44 (0)2476 528240 (Phone)

Bernard Van den Berg

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

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