RISK-RISK VERSUS STANDARD GAMBLE PROCEDURES FOR MEASURING HEALTH STATE UTILITIES

Contingent valuation (CV) has been widely used to measure the potentia l benefits derived from different policy decisions. However, doubt now exists about the validity of the CV method and alternative approaches to benefit valuation have been proposed. The paper reports on the res ults of a study which was designed to test the viability of two of the most prominent of the alternatives: the risk-risk (RR) and standard g amble (SG) approaches. If individual preferences are consistent with t he axioms of von Neumann-Morgenstern expected utility theory (EUT) the n the two methods should generate the same interval scales for any giv en set of health states. However, the results show that SG utilities a re substantially higher than RR ones, thus casting doubt on these axio ms. The paper discusses alternatives to EUT which might better explain the discrepancies found. It also considers whether the results might be explained in terms of status-quo bias and/or by the relative diffic ulty of RR questions. The results presented may have important implica tions for other areas of applied research in which there exists uncert ainty about outcomes.