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Theoretical Arguments for the Discounting of Health Consequences

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Abstract

Despite the theoretical arguments presented in the literature regarding discounting over the last 25 years, no satisfactory reply has yet been offered to the question of whether health consequences have to be discounted at the same rate as monetary consequences in the economic evaluation of health programmes or interventions designed to improve health. Against this background, the main objective of this paper was to review and systemise these theoretical arguments, with the aim of determining whether any of the positions identified can be accepted without reservation. Having determined that this is not possible, we investigated the rationality of discounting in the literature and, on this basis, propose a potential way to resolve the problem. Thus, we argue that the relationship between the discount of monetary and health consequences has to be determined in an indirect manner, by reference to the relationship maintained by the individual time preference rates for health and money in the context of private and social choice. Although this proposal moves the debate into the empirical field, its advantages must be weighed against the difficulties associated with the estimation of the time preferences.

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Acknowledgements

The author gratefully acknowledges the valuable comments made by John Cairns (Health Economics Research Unit, University of Aberdeen, Scotland) and Ramon Barberan (University of Zaragoza, Spain) on an earlier version of this paper. The observations of two anonymous referees have also been of considerable assistance. The authors have provided no information on sources of funding or on conflicts of interest directly relevant to the content of this review.

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  1. Dpt de Estructura e Historia Económica y Economía Pública, Facultad de Derecho, Universidad de Zaragoza, Pedro Cerbuna, 12, Zaragoza, 50009, Spain

    Angelina Lazaro

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Correspondence to Angelina Lazaro.

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Lazaro, A. Theoretical Arguments for the Discounting of Health Consequences. Pharmacoeconomics 20, 943–961 (2002). https://doi.org/10.2165/00019053-200220140-00001

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