Happy and Healthy: A Joint Model of Health and Life Satisfaction

Monica Hernandez-Alava, Christopher James Sampson, Allan Wailoo

ABSTRACT:

Subjective well-being has been proposed as an alternative to preference based values of health benefit for use in economic evaluation. We develop a latent factor model of health and well-being in order to compare reported satisfaction with life, satisfaction with health and SF-6D responses. This approach provides a coherent, integrated statistical framework for assessing di erences between these outcomes on the same scale. Using panel data from the British Household Panel Survey we find that SF-6D and satisfaction with health are influenced to a similar degree by changes in latent health and satisfaction with life is less responsive. For the average individual, there are no substantial di erences in the relative impacts of physical versus mental health conditions between the three measures. These findings suggest that the diferences between experienced and hypothetical values of health and life satisfaction may not lead to substantial diferences in the assessment of value from health technologies.