Thinking and Deciding

THE MEASUREMENT OF UTILITY 317
Many treatments are far more cost-effective than this, and, when resources are limited,
we can improve matters on the whole by taking money from the less effective
treatments and spending it on the more effective ones. Note, however, that this kind
of argument is useful only when costs are limited and can be redirected in this way.
This argument does not tell us how much a QALY is truly worth. From a decisiontheoretic
point of view, that would depend on the alternatives available for spending
the money, and the utility that those provide.
We will begin the discussion of utility measurement with the kind of measures
used in health. The basic problem is to elicit judgments about health-related quality
of life, but we will speak of utility. The methods are useful elsewhere, outside of the
health domain.
The measurement of utility
The problem of measuring utility has both a theoretical and a practical aspect. The
theoretical problem is to state the conditions under which utility can be measured
using each of the methods that have been devised. What would it mean for each
method to be internally consistent? The practical problem is to state the conditions
under which each method should be used. Which methods are easiest to use? Most
internally consistent? Most sensitive to factors that should affect them and most
insensitive to factors that should not affect them? How can we improve each method
in these respects? Before dealing with the various methods for measuring utility, let
us consider some general aspects of the problem, the nature of utility measurement,
and the distinction between direct and indirect measures.
Utility measurement as prediction
When we try to measure utility in any way, we are, in essence, making a prediction
about the utility of an outcome. We do not know everything relevant that would allow
us to judge the outcome in the light of our goals. Even putting aside the uncertainty
about which variants of an outcome will occur, we might be unaware of the extent to
which factors will affect the achievement of our goals. I have discussed the difference
between predicted utility and true utility in section 11.
Utility measurement is not always prediction. Some of our goals do not concern
experiences, or things that happen at a given point in time. (For example, we can
want the house we build to last for a long time after our death, or want our great
grandchildren to have good lives.) It is still helpful to suppose that utility is real
and that we are trying to judge it. We can be more accurate or less accurate in our
judgments, just as we can predict our experiences accurately or inaccurately. The
judgment from which we infer utility is not the same as the utility itself. All along,
we have assumed that the question “which option is best” has a right answer (which
might be that two are equally good). We have thus assumed that utility is real. We can
try to judge what it is, and our judgments will be inaccurate to varying degrees, but