Your money or your life: A prescriptive model for health, safety, and consumption decisions


Journal Article

In this paper we develop a conceptual framework and model for valuing risks to an individual's health and life and to support decision making about investments in health, quality of life, and safety. Our treatment of health risks in the model builds on the popular quality-adjusted-life-year (QALY) framework that balances health quality and length of life issues. We extend this framework to consider financial concerns as well as health quality and length of life. Our model considers uncertainty in income and health and incorporates the decision maker's ability to adjust consumption over time in response to changes in expectations about health and income. We use this model to study the optimal tradeoffs between financial gains or losses and improvements or reductions in health or longevity and apply it in two example medical decision problems. © 2005 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Smith, JE; Keeney, RL

Published Date

  • September 1, 2005

Published In

Volume / Issue

  • 51 / 9

Start / End Page

  • 1309 - 1325

Electronic International Standard Serial Number (EISSN)

  • 1526-5501

International Standard Serial Number (ISSN)

  • 0025-1909

Digital Object Identifier (DOI)

  • 10.1287/mnsc.1050.0402

Citation Source

  • Scopus