TIME PREFERENCE, DURATION AND HEALTH STATE VALUATIONS

There is increasing interest in health status measurement and the rela tive weights that people attach to different states of health and illn ess. One important issue which has been raised is the effect that the time spent in a health state may have on the way that state is perceiv ed. Previous studies have suggested that the worse a state is, the mor e intolerable it becomes as it lasts longer. However, for most of thes e studies, it is impossible to determine how much of what was observed is attributable to the time spent in the state and how much is attrib utable to when it was occurring. This paper reports on a pilot study d esigned to test the feasibility of using the Time Trade-Off (TTO) meth od to isolate the effect of pure time preference from the effect of du ration per se. Interviews were conducted with 39 members of the genera l population who were asked to rate 5 health states for durations of o ne month, one year and ten years. In aggregate, rates of time preferen ce were very close to zero which suggests that the implicit assumption of the TTO method that there is no discounting may be a valid one. Ho wever, that more respondents had negative (rather than positive) rates , casts some doubt on the axioms of discounted utility theory. In addi tion, implied valuations for states lasting for short periods were oft en counter-intuitive which questions the feasibility of using the TTO method to measure preferences for temporary health states.