Appraising the use of contingent valuation

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Abstract
The valuation of treatments and health states has been pursued in a number of ways. Most predominant are contingent valuation (CV), QALYs, and HYEs. CV--that is, willingness to pay and willingness to accept--is the only one of these methods that can be consistent with welfare economic theory, but, as discussed by Gafni (1990), in order to do so three criteria must be met. This article argues that the fulfilment of these criteria is not sufficient to obtain useful results, and some additional criteria are suggested. Several CV studies carried out in the area of health are reviewed, and their compliance or non-compliance, with both sets of criteria, is discussed. Finally, it is argued that, although CV is the more theoretically correct method, it is not a superior tool to QALYs and HYEs, and that the decision as to which is the appropriate valuation method depends on the policy issue at hand.