We have considered two attempts to link CBA and CEA. The first, by Johannesson and
Meltzer (1998), requires that incomes be held constant across individuals for WTP to be
proportional to the QALY gain. In relaxing this assumption, we find that health must be additively
separable to consumption in the utility function, since a relationship between health
and income would influence the ability of an individual to enjoy consumption. However,
this ‘link’ does not build a suitable bridge between CBA and CEA in the strict welfarist
sense since individual judgements (about the trade-offs between health and income) are
overruled in formulating a societal CBA. The second attempt to link CBA and CEA, by
Bleichrodt and Quiggin (1999), differs in that individual WTP figures are used. Whilst they
find conditions under which individuals would choose to maximise QALYs under a given cost-per-QALY threshold, this threshold will differ across individuals and, without a common threshold, their analysis is not consistent with a single implementation of CEA and so no substantive link exists here either
We have considered two attempts to link CBA and CEA. The first, by Johannesson andMeltzer (1998), requires that incomes be held constant across individuals for WTP to beproportional to the QALY gain. In relaxing this assumption, we find that health must be additivelyseparable to consumption in the utility function, since a relationship between healthand income would influence the ability of an individual to enjoy consumption. However,this ‘link’ does not build a suitable bridge between CBA and CEA in the strict welfaristsense since individual judgements (about the trade-offs between health and income) areoverruled in formulating a societal CBA. The second attempt to link CBA and CEA, byBleichrodt and Quiggin (1999), differs in that individual WTP figures are used. Whilst theyfind conditions under which individuals would choose to maximise QALYs under a given cost-per-QALY threshold, this threshold will differ across individuals and, without a common threshold, their analysis is not consistent with a single implementation of CEA and so no substantive link exists here either
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