First, Johannesson and Meltzer (1998) have claimed that an article by Pratt and Zeck-
hauser (1996, hereafter PZ) “provides the strongest theoretical evidence to date” for the
use of a constant WTP-per-QALY figure. PZ’s model uses a veil of ignorance based on
perfectly comparable utility functions. Here, linking CBA and CEA requires that the ben-
efit (in utility terms) from a given health improvement is constant across all individuals, so
that maximising expected benefits behind the veil necessarily maximises aggregate health.
Section 2 considers the prospects for a CBA–CEA link within PZ’s framework and shows
that highly restrictive and counter-intuitive assumptions are required. Second, Bleichrodt
and Quiggin (1999) show the conditions under which life-cycle preferences are consistent
with QALY maximisation. By arguing that individuals will consume the same amount in
each period, they set out the conditions under which all individuals weigh their own QALYs
equally, and so form a basis for CEA in welfare theoretic terms. Section 3 discusses the
results obtained by Bleichrodt and Quiggin (1999) and argues that they do not in fact link
the analyses, even when the conditions they set down are met.
First, Johannesson and Meltzer (1998) have claimed that an article by Pratt and Zeck-hauser (1996, hereafter PZ) “provides the strongest theoretical evidence to date” for theuse of a constant WTP-per-QALY figure. PZ’s model uses a veil of ignorance based onperfectly comparable utility functions. Here, linking CBA and CEA requires that the ben-efit (in utility terms) from a given health improvement is constant across all individuals, sothat maximising expected benefits behind the veil necessarily maximises aggregate health.Section 2 considers the prospects for a CBA–CEA link within PZ’s framework and showsthat highly restrictive and counter-intuitive assumptions are required. Second, Bleichrodtand Quiggin (1999) show the conditions under which life-cycle preferences are consistentwith QALY maximisation. By arguing that individuals will consume the same amount ineach period, they set out the conditions under which all individuals weigh their own QALYsequally, and so form a basis for CEA in welfare theoretic terms. Section 3 discusses theresults obtained by Bleichrodt and Quiggin (1999) and argues that they do not in fact linkthe analyses, even when the conditions they set down are met.
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