A consistency test of the time trade-off

• Published in: Journal of health economics Vol. 22; no. 6; pp. 1037 - 1052
• Main Authors: Bleichrodt, Han, Pinto, Jose Luis, Maria Abellan-Perpiñan, Jose
• Format: Journal Article
• Language: English
• Published: Netherlands Elsevier B.V 01-11-2003; Elsevier; Elsevier Sequoia S.A
• Series: Journal of Health Economics
• Subjects: Adult; Algorithms; Anniversaries; Attitude to Health; Back Pain - physiopathology; Back Pain - psychology; Bias; Consistency; Cost effectiveness; Cost-Benefit Analysis; Costs; Cost–utility analysis; Economic models; Economics; Health; Health administration; Health economics; Health Services Research; Health Status; Humans; Loss; Loss aversion; Markov analysis; Psychometrics; Risk aversion; Spain; Surveys and Questionnaires; Time; Time Factors; Time trade-off; Time tradeoff technique; Trade-off; Tradeoff analysis; Utility analysis; Utility functions; Welfare; I10; Cost–utility analysis; Time trade-off; Loss aversion
• ISSN: 0167-6296; 1879-1646
• DOI: 10.1016/S0167-6296(03)00046-8

This paper tests the internal consistency of time trade-off utilities. We find significant violations of consistency in the direction predicted by loss aversion. The violations disappear for higher gauge durations. We show that loss aversion can also explain that for short gauge durations time trade-off utilities exceed standard gamble utilities. Our results suggest that time trade-off measurements that use relatively short gauge durations, like the widely used EuroQol algorithm, are affected by loss aversion and lead to utilities that are too high.