Time preference bias in time trade-off

This study examined whether time trade-off (TTO) values adjusted for time preferences are more consistent with individuals’ preferences. This was carried out by testing the constant proportional trade-off (CPTO) assumption, and both individual specific and standard discount rates were used. The results show that the mean adjustment factor is around 0.03. This may influence relative cost-effectiveness in economic evaluations. The CPTO assumption holds with respect to both unadjusted TTO values and TTO values adjusted for individuals’ time preference, and therefore no conclusions can be drawn as to whether the adjusted values are more consistent with individuals’ preferences. However, the CPTO assumption is violated when standard discount rates are used. This clearly shows that the use of standard discount rates should be avoided. Further exploration of the time preference bias and other biases in TTO is identified as an important area of future research.