Moreover, there are unresolved issues even where consumption smoothing is possible.
Firstly, all individuals must agree on a WTP-per-QALY figure to be used in CEA. This is
highly unlikely since, as Bleichrodt and Quiggin themselves acknowledge, each individual’s
WTP-per-QALY will increase in (smoothed) consumption. Therefore, we still require that
discounted lifetime income be the same across individuals. Secondly, since health and
consumption may be correlated, an individual who is ill may have lower income over
his remaining lifespan, which may reduce his per-period consumption. In this case, health
improvements improve utility from increased smoothed consumption in addition to its direct
effect. Since both are included in individual WTP, we would expect that those interventions
that improve earning capacity would be valued more highly under CBA than those that do
not.