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Testing rank-dependent utility theory for health outcomes

Oliver, Adam (2003) Testing rank-dependent utility theory for health outcomes. Health Economics, 12 (10). pp. 863-871. ISSN 1057-9230

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Abstract

Systematic violations of expected utility theory (EU) have been reported in the context of both money and health outcomes. Rank-dependent utility theory (RDU) is currently the most popular and influential alternative theory of choice under circumstances of risk. This paper reports a test of the descriptive performance of RDU compared to EU in the context of health. When one of the options is certain, violations of EU that can be explained by RDU are found. When both options are risky, no evidence that RDU is a descriptive improvement over EU is found, though this finding may be due to the low power of the tests.

Item Type: Article
Official URL: http://www3.interscience.wiley.com/cgi-bin/home
Additional Information: © 2003 John Wiley & Sons, Ltd.
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
Sets: Research centres and groups > LSE Health
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 11 Jul 2008 16:59
URL: http://eprints.lse.ac.uk/19326/

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