- Characterizing QALYs by Risk Neutrality
- Journal of Risk and Uncertainty
- Volume | Issue number
- 15 | 15
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
This paper shows that QALYs can be derived from more elementary conditions than thought hitherto in the literature: it suffices to impose risk neutrality for life years in every health state. This derivation of QALYs is appealing because it does not require knowledge of concepts from utility theory such as utility independence -risk neutrality is a well known condition. Therefore our axiomatization greatly facilitates the assessment of the normative validity of QALYs in medical decision making. Moreover, risk neutrality can easily be tested in experimental designs, which makes it straightforward to assess the descriptive (non)validity of QALYs.
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