Relative weight on a health gain implied by Atkinson inequality aversion

Gives the weight on a small health gain to a less healthy person or group relative to the same gain to a healthier one, implied by an Atkinson epsilon. It follows from the EDE formula, in which the weight on a small gain to person i is proportional to h_i raised to the power minus epsilon. It turns epsilon into a statement a decision committee can read: how many times a QALY to the less healthy group counts.

Signature

w = (h_high / h_low)^epsilon
Inputs
InputsDefinitionUnit
h_highCurrent health of the healthier person or group, for example QALE of the richest fifthhealth units, for example years of QALE
h_lowCurrent health of the less healthy person or group, for example QALE of the poorest fifth. Above zerohealth units, in the same unit as h_high
epsilonAtkinson inequality aversion parameter, zero or above. At 0 every gain has a weight of 1none
Output
wWeight on a small health gain to the less healthy person or group relative to the same gain to the healthier oneratio, without unit

Function

Atkinson inequality index and equally distributed equivalent health function

Maps a distribution of health across people or equal-sized groups, and a chosen inequality aversion parameter epsilon, to the equally distributed equivalent (EDE) level of health and the Atkinson index. The EDE is the level of health which, if everyone had it, would be judged as good as the actual unequal distribution. The index is the share of mean health that could be given up for full equality without lowering social welfare. In distributional cost-effectiveness analysis the EDE ranks programmes and the index describes how far each one leaves health unevenly spread.

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Implementations

  • Excel

    Atkinson relative weight in one cell

    With the two health levels in cells named HealthHigh and HealthLow and the aversion parameter in Epsilon, Excel returns the relative weight.

    =(HealthHigh/HealthLow)^Epsilon

Assumptions

  • Small gains at current health levels for the Atkinson weight

    The weight applies to small gains evaluated at the stated health levels. As a programme narrows the gap the ratio of health levels falls, and so does the weight on further gains.

Worked examples

  • Implied weight at the English median epsilon

    With QALE of 62 years for the poorest fifth and 74 years for the richest fifth, the starting point of the English elicitation study, an epsilon of 10.95 gives a weight of about 6.94. Robson and colleagues report an implied weight of 6.95: a QALY gained by the poorest fifth counts almost seven times as much as one gained by the richest fifth.

    h_high = 74; h_low = 62; epsilon = 10.95; w = 6.94
  • Implied weight in the two-group example at epsilon of 2

    In the article's two-group example, with baseline QALE of 60 and 72 years, an epsilon of 2 gives a gain to the less healthy group 1.44 times the weight of a gain to the healthier group.

    h_high = 72; h_low = 60; epsilon = 2; w = 1.44

Common errors

  • Inverting the health ratio in the Atkinson weight

    Writing the ratio as the lower health level over the higher gives the reciprocal, about 0.144 instead of 6.94 at epsilon of 10.95 with QALE of 62 and 74 years, which reads as if gains to the richest fifth counted more.

  • Quoting the Atkinson weight without its health levels

    The same epsilon implies different weights at different health gaps. At epsilon of 10.95 the weight is about 6.94 between QALE of 62 and 74 years but about 7.36 between 60 and 72 years, so a statement such as seven times describes epsilon only at the stated levels.

Sources

  • Implied weight on gains to the poorest fifth in the English elicitation

    Robson M, Asaria M, Cookson R, Tsuchiya A, Ali S. Eliciting the level of health inequality aversion in England. Health Economics. 2017;26(10):1328-1334. Methods, with the initial QALE of 62 and 74 years, and Table 1, which reports the median Atkinson epsilon of 10.95 and the implied weight of 6.95 on a marginal gain to the poorest fifth relative to the richest fifth.

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Canonical Identity