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Direct Preference
Elicitation/Direct Utility Assessment
Direct preference measurement
methods include:
- Standard Gamble
(SG)
- Time Trade-Off (TTO)
- Willingness-To-Pay
(WTP) (also known as "contingent valuation"), and
- Person Trade-Off
(PTO)
SG flows directly from
VNM theory. Values obtained using the TTO often approximate those
obtained with the SG. WTP and PTO have different theoretical foundations
and are not VNM utility methods.
In the SG,
the respondent considers what probability of (usually) painless
and immediate death she would risk in order to be restored to
perfect health, or better health than the health state under consideration.
Techniques for TTO and SG are described by Torrance (Torrance,
1986).
The TTO measures
one's willingness to live a shorter but healthier life. The respondent
considers how much of remaining life expectancy he or she would
be willing to trade off in order to live in perfect health.
In WTP (willingness-to-pay),
the respondent considers how much she would be willing to pay,
either as a lump sum or as continuing payments analogous to insurance
payments, to avoid an undesirable health state. (Kenkel,
Berger et al., 1994; O'Brien
and Gafni, 1996; Diener,
O'Brien et al., 1998).
The PTO method
seeks to equate a certain number of persons with a given health
state with an equivalent number of persons with normal health
or a different health state. It asks people to say how many outcomes
of one kind they consider equivalent in social value to x outcomes
of another kind (Nord,
1995).
It is worth noting
that the rating scale (RS)
is sometime listed as a method for collecting data on utilities;
however, rating scales lack validity for utility assessment.
Standard Gamble
SG
is the name by which the method described by von Neumann and Morgenstern
is now known in health applications.
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