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Valuing Nonfatal Health Risk Reductions

2018

This paper explores approaches for valuing nonfatal risk reductions associated with policy choices in low- and middle-income countries. The approach for valuation ideally would be based on estimates of individuals’ willingness to pay for changes in their own risks. However, high quality valuation research is not available for many nonfatal conditions even in high-income settings. Typically, two approaches are used either alone or in combination as rough proxies. The first involves applying an estimate of averted costs, often referred to as the cost of illness (COI). The second involves applying monetized estimates of quality-adjusted life years (QALYs) or disability-adjusted life years (DALYs). Averted cost estimates are relatively easy to develop and implement, but may understate the value of the risk reduction. Monetized DALYs or QALYs may provide a more complete measure of value, but more work is needed to develop a valuation function that better reflects how individuals value changes in health status.

 

Source:

Robinson LA, Hammitt JK. Valuing Nonfatal Health Risk Reductions in Global Benefit-Cost Analysis. Guidelines for Benefit-Cost Analysis Project Working Paper No. 2, 2018. https://media.repository.chds.hsph.harvard.edu/static/filer_public/7a/e1/7ae1e5b1-1798-4faf-b471-b890db5b1198/2018_robinson_nonfat_hlth_risk_bca_prj_wp_32.pdf