Kevin Haninger

Kevin Haninger

Vice President, International Advocacy, Pharmaceutical Research and Manufacturers of America (PhRMA)

Dissertation Title:  "Valuing Health for Public Policy"

This dissertation examines theoretical, empirical, and moral questions on the economic evaluation of health. Chapter One conducts an experiment to test whether willingness to pay (WTP) to reduce risk of acute illness is proportional to the corresponding change in expected quality-adjusted life years (QALYs). WTP is elicited using dichotomous-choice questions in which respondents (n = 2,795) decide whether to purchase a more expensive food to reduce the risk of foodborne illness. Health risks vary by baseline probability of illness, reduction in probability, duration and severity of illness, and conditional probability of mortality. Our results suggest that individuals do not have a constant rate of WTP for changes in QALYs, which implies that cost-effectiveness analysis using cost per expected QALY gained is not consistent with economic welfare theory.

Chapter Two investigates the effects of health and life expectancy on aversion to financial risks. Using a standard life-cycle consumption model, we examine preferences for a risk to lifetime income and show that the effects of health and longevity on financial risk tolerance are generally ambiguous. We then conduct a stated-preference survey to empirically test the effects of health and longevity on financial risk tolerance. The survey includes self-reported measures of health as well as gambles on lifetime income that classify respondents by relative risk tolerance. Our empirical results suggest that financial risk tolerance is positively associated with both health and life expectancy.

Chapter Three examines the proposal to use equity weights in cost-effectiveness analysis, drawing on both normative and empirical motivations for improving resource allocation decisions. We propose two possible roles for equity weights: decision rules that represent the resolution of questions of distributive justice when allocating health and medical resources or, more modestly, decision tools that inform public deliberation about how to set such priorities. We identify conditions on the construction and use of equity weights as decision rules, arguing that cost-effectiveness rules based on equity weights that fail to satisfy one or more conditions could produce inequitable results. Equity weights ultimately fail to resolve the underlying need for a deliberative process, but have promise as tools that inform and even focus public debate.


Graduation Year