10.1177/0272989X04268955 MEDICAL DECISION MAKING/SEP–OCT 2004 OSCH, WAKKER, HOUT, STIGGELBOUT UTILITIES AND PREFERENCES CORRECTING BIASES SEP–OCT Correcting Biases in Standard Gamble and Time Tradeoff Utilities Sylvie M. C. vanOsch, MSc, Peter P. Wakker, PhD, Wilbert B. van den Hout, PhD, Anne M. Stiggelbout, PhD The standard gamble (SG) method and the time tradeoff (TTO) method are commonly used to measure utilities. How- ever, they are distorted by biases due to loss aversion, scale compatibility, utility curvature for life duration, and proba- bility weighting. This article applies corrections for these bi- ases and provides new data on these biases and their correc- tions. The SG and TTO utilities of 6 rheumatoid arthritis health states were assessed for 45 healthy respondents. Vari- ous corrections of utilities were considered. The uncorrected TTO scores and the corrected (for utility curvature) TTO scores provided similar results. This article provides argu- ments suggesting that the TTO scores are biased upward rather than having balanced biases. The only downward bias in TTO scores was small and probably cannot offset the up- ward biases. The TTO scores are higher than the theoretically most preferred correction of the SG, the mixed correction. These findings suggest that uncorrected SG scores, which are higher than TTO scores, are too high. Key words: utility as- sessment; bias; loss aversion; utility curvature; probability weighting. (Med Decis Making 2004;24:511–517) U tilities can be used to measure the effects of treat- ment outcomes, and they play an important role in cost-effectiveness analyses. 1,2 Two methods to mea- sure the utility of health states are the time tradeoff (TTO) method and the standard gamble (SG) method. 3 Based on normative expected-utility arguments, the SG method has often been considered the gold stan- dard for utility measurement. However, there is much empirical evidence demonstrating that expected utility is not descriptively valid and that its violations gener- ate upward biases in SG utilities. 4–6 Less is known about the effects of biases in the TTO measurements. Some recent articles have suggested that these biases might neutralize each other, 4 so that no systematic overall bias results. It would then follow that, on average, TTO utilities are closer to true utilities than SG utilities are. This would entail a theoretical justification for the preference for the TTO method that is indeed observed in practice. Another justification for this preference is based on the higher face validity of TTO results than of SG results. In the latter, respon- dents have been commonly found to exhibit overly ex- treme risk aversion. 7 This article provides new insights into correction methods for the aforementioned biases, advanced in the economic literature, and tests them in the medical domain. BIASES IN TTO AND SG UTILITIES Bleichrodt provided an overview of the biases in utility measurement and their likely effects. 4 We dis- cuss these biases below and summarize them in Table 1. Utility Curvature The TTO assumes that the utility of life duration is linear. 3,8 This assumption is, in general, not correct. 9 Empirical evidence shows that the utility of life years is MEDICAL DECISION MAKING/SEP–OCT 2004 511 Received 25 November 2003 from the Department of Medical Deci- sion Making (SMCvO, AMS, WBvdH), Leiden University Medical Cen- ter, Leiden, the Netherlands, and Creed (PPW), University of Amster- dam, Amsterdam, the Netherlands. The abstract of this article was presented at the 24th annual meeting of the Society for Medical Deci- sion Making in Baltimore, Maryland, on 20 October 2002 and was pre- sented at the Netherlands Forum for Medical Decision Making, Nijmegen, the Netherlands on 4 April 2003. Financial support for this study was provided entirely by a grant from the Netherlands Organiza- tion for Health Research and Development–Medical Sciences (ZonMw). The funding agreement ensured the authors’ independence in designing the study, interpreting the data, and writing and publishing the report. Revision accepted for publication 6 July 2004. Address correspondence and reprint requests to Sylvie M. C. van Osch, Leiden University Medical Center, Department of Medical Deci- sion Making, J10-S, PO Box 9600, 2300 RC Leiden, the Netherlands; phone: +31 (0)71-5264570; fax: +31 (0)71-5266838; e-mail: s.m.c.van_osch@lumc.nl. DOI: 10.1177/0272989X04268955