IZA DP No. 314: Age-Differentiated QALY Losses
In this paper we evaluate the QALY losses, which are linked to the prevalence of specific chronic illnesses and impediments. The analysis is based on the individual self-rating health satisfaction question asked in the British Household Panel Survey data set. Our method is a refinement of the method of Cutler and Robertson (1997). First, we use more information regarding the relationship between the latent variable ‘health’ and its evaluation into observable QALY’s. Second, we allow the QALY loss caused by a illnesses to depend on age. For instance, according to our approach a 30 years old male suffering from diabetes would experience a QALY loss of 0.135 while this would be only 0.084, if the male is 60 years old.