Howley, P orcid.org/0000-0002-3385-629X (2017) Less money or better health? Evaluating individual’s willingness to make trade-offs using life satisfaction data. Journal of Economic Behavior & Organization, 135. pp. 53-65. ISSN 0167-2681
Abstract
Health care practitioners are increasingly required to make more efficient decisions when it comes to allocating health care expenditure. This requires not only information relating to the costs of medical interventions, but also the benefits of such interventions on individual’s overall well-being. In order to calculate the well-being losses associated with health conditions, this study uses the compensating income variation approach (CIV), to calculate the amount of extra equivalent household income to make someone who suffers from one of 15 health conditions, as well off in terms of life satisfaction as someone who does not have these health conditions. To help put these findings into perspective, this study also calculates CIVs for many other factors commonly found to be significantly associated with subjective well-being (e.g. unemployment, widowhood, separation and indicators of social capital). This paper builds on previous work using CIVs in health by addressing the issue of income endogeneity in life satisfaction and also testing how robust the derived CIVs are to the inclusion of personality measures, namely the Big Five personality traits. The analysis suggests that health conditions significantly affect individual’s quality of life and that the amount needed to make someone with a health condition as well off as someone without those health conditions can be substantive, albeit less than is commonly reported in the literature using the CIV approach to date.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2017 Elsevier B.V. All rights reserved. This is an author produced version of a paper published in Journal of Economic Behavior & Organization. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Medical conditions; Self-reported quality of life; Compensating income variation; Instrumental variables; Health |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 29 Nov 2018 11:41 |
Last Modified: | 01 Dec 2018 03:06 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jebo.2017.01.010 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:139259 |