Authors' objectives:

The main objectives of the study were to consider whether implied rates of discounting from the perspectives of individual and society differ, and whether implied rates of discounting in health differ from those implied in choices involving finance or goods. The study thus sought empirical estimates of discount rates implied by choices made by individuals for themselves compared with those made on behalf of society, and those involving health compared with those involving wealth. The study sought also to ascertain whether implied discount rates used by healthcare professionals compared with those used by the general public to see whether people making decisions about healthcare provision concur with those of the other main stakeholders, namely patients and potential patients. The study was in two parts: a review of the literature; and an empirical study in representative random samples of the general public and of healthcare professionals.

Authors' results and conclusions: The literature on discounting, time preference and eliciting preferences is extensive, too extensive to review systematically with available resources. The review focused, therefore, on papers that compared and contrasted social and private discounting, health and wealth discounting and empirical measurement. The review revealed few empirical studies in representative samples of the population (more were classroom exercises with students), few direct comparisons of public with private decision-making and few direct comparisons of health with financial discounting. The review identified almost as many methods of eliciting time preference as empirical studies of time preference: these included equipoise, standard gamble, time trade-off and person trade-off, and administration by questionnaire, postal survey, telephone interview and personal interview. Implied rates of discounting varied widely between studies depending on context, comparisons sought and mode of enquiry; for example, whether payment or receipt is to be expedited or postponed. Studies suggest that discount rates are higher the smaller the value of the outcome and the shorter the period considered. The relationship between implied discount rates and personal attributes was mixed, possibly reflecting the limited nature of the samples (mostly students) studied. Although there were few direct comparisons, some studies found that individuals apply different rates of discount to social compared with private comparisons and health compared with financial. The present study, in a random sample of 385 (lay) people and 180 health professionals, also found a wide range of implied discount rates, with little systematic effect of age, gender, educational level or long-term illness. There was evidence, in both the general public and health professional samples, that people chose a lower rate of discount in comparisons made on behalf of society than in comparisons made for themselves: medians of four financial questions in two samples were 09.5% and 5.012.5%, respectively, and of four health questions were 02.4 % and 07.7%, respectively. The differences were statistically significant. Both public and health professional samples tended to choose lower discount rates in health-related comparisons than in finance-related comparisons: medians of four individual questions were 07.7% and 512.5% and of four societal comparisons were 02.4% and 09.5%, respectively. The differences were statistically significant. On a technical note, both the present study and the literature review suggest that implied rates of discount, derived from responses to hypothetical questions, can be influenced by detail of question framing. Further research is indicated, possibly involving more in-depth interviewing and drawing inference on real, rather than hypothetical choices.

Authors' recommendations: The present study suggests that both the lay public and healthcare professionals consider that the discount rate appropriate for public decisions is lower than that for private decisions. This finding suggests that lay people as well as healthcare professionals, used to making decisions on behalf of others, recognise that society is not simply an aggregate of individuals. It also implies a general appreciation that society is more stable and has a more predictable future than does the individual. There is fairly general support for this view in the theoretical literature and limited support in the few previous direct comparisons. The findings of the present study have implications for all public decision-making and particularly for healthcare planning.

Authors' methods: Systematic review, Empirical study

Project Status: Completed

URL for project: http://www.hta.ac.uk/978

Year Published: 2003

English language abstract: An English language summary is available

Publication Type: Not Assigned

Country: England, United Kingdom

Organisation Name: NIHR Health Technology Assessment programme

Contact Address: NIHR Journals Library, National Institute for Health and Care Research, Evaluation, Trials and Studies Coordinating Centre, Alpha House, University of Southampton Science Park, Southampton SO16 7NS, UK

Contact Name: journals.library@nihr.ac.uk

Contact Email: journals.library@nihr.ac.uk

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