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- W2258784876 abstract "We propose a dynamic framework to study the option value of medical innova- tion, which accrues - in expectation - to healthy individuals who anticipate some possibility of future illness. We apply our framework to evaluate an HIV treatment breakthrough known as HAART. In lowering both the expected cost and likelihood of HIV infection, HAART reduced the implicit price of risky sex. Forward-looking agents responded by optimally shifting their behavior. The magnitude of their responses permits identication of health state dependent utility parameters, from which we can derive the the option value of medical innovation. We nd that the option value of HAART introduction for healthy, uninfected agents corresponds to between 2 and 4 years of life, with greater value accruing to individuals with stronger preferences for risky sex or a higher propensity to quickly fall ill once infected with HIV." @default.
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- W2258784876 date "2013-01-01" @default.
- W2258784876 modified "2023-10-16" @default.
- W2258784876 title "Health and the Option Value of Medical Innovation" @default.
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- W2258784876 doi "https://doi.org/10.2139/ssrn.2116557" @default.
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