Time preference and individual health profiles

Resumen

A generalization of the QALY model for general health profiles is provided in this paper. Two natural assumptions on inter-temporal preferences play a key role in arriving at our representation. The first one, Indifference to the future afterdeath, is uncontestable in our framework, and the second one, Preference Independence of future with regard to the past, is weaker than the usual Additive Independence or Mutual Utility Independence conditions traditionally employed. The semi-separable structure obtained for the utility function on health profiles is very similar to the discounted QALY, but unlike it, endogenous discount rates, depending on past states of health, now emerge.