Karlstad University Working Papers in Economics,
Karlstad University, Department of Economics

Abstract: As the use of cost-effectiveness analysis with quality adjusted life years (QALY) as the outcome measure grows in policy use, a major unresolved issue is that of the monetary value to place on a QALY. This paper addresses this issue by estimating and discussing willingness to pay (WTP) estimates for a QALY in Sweden This paper uses all published estimates of the value of a statistical life since the year 2000, based on a Swedish population, to implicitly derive the WTP for a QALY. Based on 16 recently published estimates of the value of a statistical life (year 2000 or later) in Sweden, 11 papers explicitly stating that they estimate policy values of VSL are used to estimate the WTP for a QALY. Estimates range from 750,000 to 3,200,000 Swedish kronor (approx. €80,000 to €350,000) assuming a discount rate of 3%. Using the current government-recommended estimate of value of a statistical life produces a value of approx. 1.2 million Swedish kronor (€130,000) per QALY. There is significant variance in the WTP for a QALY based on conversions from value of statistical life estimates in Sweden. Still, using a discount rate of 3%, the range of estimates in this paper is higher compared to the current informal “thresholds” as discussed by Swedish government authorities.

Keywords: QALY; Willingness to pay; Value of a statistical life; Contingent Valuation

JEL-codes: D61; H51; I18

18 pages, April 2, 2012

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