Many health risks are ambiguous in the sense that reliable and credible information about these risks is unavailable. In health economics, ambiguity is usually handled through sensitivity analysis, which implicitly assumes that people are neutral towards ambiguity. However, empirical evidence...

The concentration index is widely used to measure income-related inequality in health. No insight exists, however, whether the concentration index connects with people's preferences about distributions of income and health and whether a reduction in the concentration index reflects an increase...

Gandjour and Gafni (2010) criticize our paper on two counts. Their first point of criticism is ill-founded and results from many mathematical mistakes that they make. The second is due to a lack of understanding of the general principles of empirical research.

The person tradeoff (PTO) is commonly used in health economic applications. However, to date it has no theoretical basis. The purpose of this paper is to provide this basis from a set of assumptions that together justify the most common applications of the PTO method. Our analysis identifies the...

Most health care evaluations today still assume expected utility even though the descriptive deficiencies of expected utility are well known. Prospect theory is the dominant descriptive alternative for expected utility. This paper tests whether prospect theory leads to better health evaluations...