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Decision Thresholds and Changes in Risk for Preventive Treatment
Author(s) -
Courbage Christophe,
Rey Béatrice
Publication year - 2016
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3127
Subject(s) - stochastic dominance , context (archaeology) , dominance (genetics) , risk analysis (engineering) , actuarial science , medicine , disease , risk assessment , expected utility hypothesis , intensive care medicine , economics , econometrics , paleontology , biochemistry , chemistry , management , pathology , biology , gene , mathematical economics
This paper investigates the notion of treatment threshold for preventive treatment with potential side effects in the context of changes in risk. Changes in risk are defined by the concept of n th‐order stochastic dominance and concern the effectiveness of preventive treatment, side effects, severity of the potential disease, and comorbidity risk. The impact of a riskier environment on the probability of disease threshold above which the preferable decision is to undergo preventive treatment is shown to depend on both mixed risk averse individual preferences and the configuration of increase in risk considered. These results suggest that neglecting differences between risks when evaluating the treatment threshold is likely to lead to substantial errors in most cost‐benefit applications for preventive treatment. Copyright © 2014 John Wiley & Sons, Ltd.