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PharmacoEconomics

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01-09-2006 | Leading Article

Using Discrete Choice Experiments within a Cost-Benefit Analysis Framework

Some Considerations

Author: Dr Emma McIntosh

Published in: PharmacoEconomics | Issue 9/2006

Abstract

A great advantage of the stated preference discrete choice experiment (SPDCE) approach to economic evaluation methodology is its immense flexibility within applied cost-benefit analyses (CBAs). However, while the use of SPDCEs in healthcare has increased markedly in recent years there has been a distinct lack of equivalent CBAs in healthcare using such SPDCE-derived valuations. This article outlines specific issues and some practical suggestions for consideration relevant to the development of CBAs using SPDCE-derived benefits.

The article shows that SPDCE-derived CBA can adopt recent developments in cost-effectiveness methodology including the cost-effectiveness plane, appropriate consideration of uncertainty, the net-benefit framework and probabilistic sensitivity analysis methods, while maintaining the theoretical advantage of the SPDCE approach. The concept of a cost-benefit plane is no different in principle to the cost-effectiveness plane and can be a useful tool for reporting and presenting the results of CBAs.

However, there are many challenging issues to address for the advancement of CBA methodology using SPCDEs within healthcare. Particular areas for development include the importance of accounting for uncertainty in SPDCE-derived willingness-to-pay values, the methodology of SPDCEs in clinical trial settings and economic models, measurement issues pertinent to using SPDCEs specifically in healthcare, and the importance of issues such as consideration of the dynamic nature of healthcare and the resulting impact this has on the validity of attribute definitions and context.

¹ Contingent valuation is a method that uses survey questions to elicit people’s preferences for goods by asking what they would be willing to pay or receive for specified increments or decrements in the good.

² The MRS of good X for good Y is the amount of good Y that a person is willing to give up to obtain one additional unit of good X. The MRS measures the value that the consumer places on one extra unit of a good, where the opportunity cost is quantified by the amount of another good sacrificed

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Title: Using Discrete Choice Experiments within a Cost-Benefit Analysis Framework
Some Considerations
Author: Dr Emma McIntosh
Publication date: 01-09-2006
Publisher: Springer International Publishing
Published in: PharmacoEconomics / Issue 9/2006
Print ISSN: 1170-7690
Electronic ISSN: 1179-2027
DOI: https://doi.org/10.2165/00019053-200624090-00004

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Using Discrete Choice Experiments within a Cost-Benefit Analysis Framework

Some Considerations

Abstract

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