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Category: Project

Description: The economic evaluation of new healthcare technologies or broader policy interventions impacting population health using cost-benefit or cost-utility analyses requires valid estimates of the monetary equivalent of health gains, measured for example as € per quality-adjusted-life-years (QALYs). One promising approach is the well-being valuation method that utilizes large-scale survey data to calculate the monetary value of non-market goods using a compensating income variation approach. The aim of this study was to use data from the German Socio-Economic Panel (SOEP) to perform such a well-being valuation for QALYs. To address endogeneity concerns with respect to the impact of income on life satisfaction we use an instrumental variable based approach exploiting exogenous variation of predicted incomes across time and industry/occupation groups. The file repository contains the initial working paper resulting from this project as well as an updated version of the Stata code that can be used to replicate our findings. This project was accepted for publication in the journal Health Economics. The open access journal publication can be found here: https://onlinelibrary.wiley.com/doi/10.1002/hec.4279 All analyses were conducted using Stata 16.