EQUITY CONSIDERATIONS IN UTILITY-BASED MEASURES OF HEALTH OUTCOMES IN ECONOMIC APPRAISALS - AN ADJUSTMENT ALGORITHM

In this paper we consider whether methods currently used to measure utility of health outcomes are consistent with the equity criteria adopted by researchers. We show that unless the chosen equity criterion is incorporated in the design of the measurement instrument, the derived health state utilities are inconsistent with the equity criterion (except under special circumstances). Adjustment algorithms are derived, based on the axioms of von Neumann-Morgenstern utility theory, which take account of difference equity criteria currently adopted in the literature. The proposed approach is based on simple lottery questions of the type already used widely in empirical studies. © 1991.