Discounting and health benefits
Article first published online: 18 SEP 2006
Copyright © 1992 John Wiley & Sons, Ltd.
Volume 1, Issue 1, pages 71–76, April 1992
How to Cite
Parsonage, M. and Neuburger, H. (1992), Discounting and health benefits. Health Econ., 1: 71–76. doi: 10.1002/hec.4730010110
- Issue published online: 18 SEP 2006
- Article first published online: 18 SEP 2006
- investment appraisal;
- health benefits;
This paper argues that non-monetary health benefits should not be discounted at the same rate as variables expressed in monetary terms. It argues instead that the appropriate discount rate should be at or close to zero. It explores the various influences of rising income, age and pure time preference on the relative value of current and future health states. It examines various arguments advanced to justify the current practice of discounting health benefits at the same rate as monetary costs. These include uncertainty and delay. The article concludes with an analysis of the likely impact of adopting a zero discount rate on the ranking of health interventions.