Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (1)

Health Econ. 2004 Sep;13(9):909-12; discussion 919-24. doi: 10.1002/hec.869.


Lancsar and Savage argue that current methods of deriving welfare estimates, using discrete choice experiments, are inconsistent with random utility and welfare theory. In this paper I show that this not the case. The general formula proposed by Small and Rosen for estimating welfare, which Lancsar and Savage claim should be used, reduces to the method used by health economists for state of the world models. The important question then becomes when are state of the world models, as opposed to multiple alternative models, appropriate?

Publication types

  • Comment

MeSH terms

  • Asthma / drug therapy
  • Asthma / economics
  • Asthma / psychology
  • Attitude to Health*
  • Choice Behavior*
  • Cost-Benefit Analysis
  • Drug Costs / statistics & numerical data
  • Health Status*
  • Humans
  • Models, Econometric*
  • Models, Psychological
  • Quality-Adjusted Life Years*
  • Reproducibility of Results
  • Treatment Outcome