Journal of Health Economics 23 (2004) 353–367 A new and more robust test of QALYs Jason N. Doctor a,∗ , Han Bleichrodt b , John Miyamoto a , Nancy R. Temkin a , Sureyya Dikmen a a Department of Medical Education, Division Biomedical and Health Informatics (MEBI), School of Medicine, University of Washington, 1959 N.E. Pacific Street, P.O. Box 357240, Seattle, WA 98195-6490, USA b iMTA/iBMG, Erasmus University, Rotterdam, The Netherlands Received 1 March 2003; received in revised form 1 November 2003; accepted 25 November 2003 Abstract Previous empirical tests of quality-adjusted life-years (QALYs), the most widely used outcome measure in economic evaluations of health care, generally yielded negative results. These tests were, however, for the most part based on expected utility, which is now widely acknowledged to be descriptively inaccurate. The observed violations might, therefore, have been caused by vi- olations of expected utility. We performed a new test of QALYs, which is valid under expected utility and under the two most influential non-expected utility theories, rank-dependent utility and prospect theory, and found considerable support for the QALY model. Our findings sug- gest that QALYs may be valid if nonexpected utility formulas are used to compute health state utilities. © 2004 Elsevier B.V. All rights reserved. JEL classification: D81; I10 Keywords: Quality-adjusted life years; Rank-dependent utility; Prospect theory; Utility measurement 1. Introduction The quality-adjusted life-years (QALY) model is the most widely used outcome measure in economic evaluations of health care. QALYs are computed by adjusting each year of life by the quality of life in which it is spent. They are intuitively appealing, i.e. easy to explain to doctors and policy makers, and are tractable for decision modeling, which explains their popularity in practical research. A disadvantage of the QALY model is that it represents ∗ Corresponding author. Tel.: +1-206-616-6640; fax: +1-206-616-3461. E-mail address: jdoctor@u.washington.edu (J.N. Doctor). 0167-6296/$ – see front matter © 2004 Elsevier B.V. All rights reserved. doi:10.1016/j.jhealeco.2003.11.004