Estimating the monetary value of health and capability well‑being applying the well‑being valuation approach
The European Journal of Health Economics , Volume 21 p. 1235- 1244
Background: Quality of life measures going beyond health, like the ICECAP-A, are gaining importance in health technology assessment. The assessment of the monetary value of gains in this broader quality of life is needed to use these measurements in a cost-effectiveness framework.
Methods: We applied the well-being valuation approach to calculate a first monetary value for capability well-being in comparison to health, derived by ICECAP-A and EQ-5D-5L, respectively. Data from an online survey administered in February 2018 to a representative sample of UK citizens aged 18–65 was used (N = 1512). To overcome the endogeneity of income, we applied an instrumental variable regression. Several alternative model specifications were calculated to test the robustness of the results.
Results: The base case empirical estimate for the implied monetary value of a year in full capability well-being was £66,597. The estimate of the monetary value of a QALY, obtained from the same sample and using the same methodology amounted to £30,786, which compares well to previous estimates from the willingness to pay literature. Throughout the conducted robustness checks, the value of capability well-being was found to be between 1.7 and 2.6 times larger than the value of health.
Conclusion: While the applied approach is not without limitations, the generated insights, especially concerning the relative magnitude of valuations, may be useful for decision-makers having to decide based on economic evaluations using the ICECAP-A measure or, to a lesser extent, other (capability) well-being outcome measures.
|Capability approach · Economic evaluation · Value of health · Subjective well-being · Well-being valuation|
|Health: General (jel I10), Welfare and Poverty: General (jel I30)|
|The European Journal of Health Economics|
|Organisation||Erasmus School of Health Policy & Management (ESHPM)|
Himmler, S.F.W, van Exel, N.J.A, & Brouwer, W.B.F. (2020). Estimating the monetary value of health and capability well‑being applying the well‑being valuation approach. The European Journal of Health Economics, 21, 1235–1244. doi:10.1007/s10198-020-01231-7