Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

In a given population, the probabilities of dying in successive 10-year intervals, in percent, are [6, 4, 4, 4, 4, 8, 15, 20, 40, 100]. Assume that total deaths in each interval occur evenly throughout the interval.

i) Find the proportion of individuals in this population who survive to the end of each 10-year interval. Also find the approximate life expectancies in this population at birth, and at age 60.

Now suppose that there are two diseases that may affect the quality of life of individuals in this population. On their sixtieth birthday, surviving individuals (that is, those surviving to the end of interval 6) face a 10% risk of getting disease A, from which they will never recover, and which reduces the quality of their remaining life by 40% (but does not change their risk of dying). On their seventieth birthday, survivors who don't already suffer from A also face a 10 % risk of getting it, with the same consequences. Moreover, there is another disease, B, which, at any given time, afflicts 25% of all those in their 70s, 80s, and 90s, and which reduces the sufferer's quality of life by 30% but does not change their risk of dying.

ii) Calculate the fractions of this population who will suffer from disease A in the last four age intervals. Assuming that a person can have both A and B, and that the probabilities of the two kinds of illness are independent, also calculate what proportions in these age brackets will have both A and B

The h factors in the formula for the quality-adjusted life expectancy (see the powerpoint slides) in the last four age intervals in this population will be the weighted average of the h factors for four population sub-groups: Those who are well; those who suffer from disease A only; those who suffer from disease B only, and those who suffer from both A and B. From the information above, the h factors for the first three groups are 1, 0.6 and 0.7 respectively. For the last one, assume that the h factor is 0.6*0..42.

iii) From this information and your answer in ii), calculate the weighted-average h factors in this population, and the quality-adjusted life expectancy for the population as a whole

[Hint: In part ii) you have calculated the fractions with disease A in these age brackets, and you know that 20% of those in the last three age brackets have B. You have also calculated what fractions in the last three age brackets have both A and B. The fractions who have either "A only" or "B only" are calculated by subtracting "both A and B" from the total fractions with A and B. The fraction who are well is the residual.]
[Cont'd on next page ]

iv) Without actually doing the calculations, explain how each of the following measures would influence this population's quality-adjusted life expectancy. Discuss what information, in addition to that provided below, you would need in order to decide which of these measures would be worthwhile.

reducing the death rates for those in their 30s and 40s from 4 to 3%;

reducing the death rates for those in their 80s from 40 to 30%

reducing the risk of getting A from 10 to 5%, on peoples' 60thand 70thbirthdays

a new drug that reduces the loss of life quality of those with disease B from 30% to 15%

Now consider 1000 people who have been diagnosed with a serious disease C. With current treatment methods, which cost $ 20,000 per patient, patients survive an average of 3 years, with a life quality that is only half that of a person in normal health. A new treatment method has been invented, which costs $70,000 per patient. It has a success rate of 60% (in unsuccessful cases, the patient dies). Among the survivors, 30% die within 5 years; half of those alive after 5 years die within the next five years; all those alive after 10 years die within the next 5 years. The life quality of survivors when the new treatment method is used is 70% of that of a person in normal health

v) Provide an estimate of the cost per additional QALY when the new treatment method is used, rather than the current one. In your calculations, again assume that total deaths during each five-year interval are evenly spread over the 5 years.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91563198
  • Price:- $50

Priced at Now at $50, Verified Solution

Have any Question?


Related Questions in Microeconomics

Question consider an economy described by the followingbull

Question: Consider an economy described by the following: • autonomous consumption=C (bar) = 2.25 trillion • autonomous investments=I (bar) = 1.3 trillion • government purchases=G = 3.6 trillion • taxes=T = 3 trillion • ...

Quesiton how can a company use licensing agreements to

Quesiton: How can a company use licensing agreements to enter world markets? What two fundamental product strategies do companies choose between when selling their products in the global marketplace? How can a company us ...

Question the dollar declined sharply in 1973-4 and 1977-8

Question: The dollar declined sharply in 1973-4 and 1977-8, and those declines were accompanied by sharply higher inflation. However, when the dollar declined even more sharply in 1986-8, the rate of inflation did not ri ...

Question write a short 2-3 page typed double-spaced essay

Question: Write a short (2-3 page, typed, double-spaced) essay. Conduct a thorough analysis of both the classical economic model and the Keynesian economic model. Describe the impact on the aggregate demand and supply cu ...

Question you just overheard your friend say the following

Question: You just overheard your friend say the following: "Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and n ...

Question acme furniture retails a chair for 250 they

Question: Acme furniture retails a chair for $250. They believe that they could raise the price of the chair by 10% and sell 30 fewer chairs per year. They have been selling 500 of these chairs per year at the current pr ...

Question from 1993 through 1995 compensation per hour in

Question: From 1993 through 1995, compensation per hour in the US rose an average of 2.2% per year, down from 5.2% the previous three years. Much of this represented the disappearance of the efficiency wage. Partly as a ...

Question the junk buyers company travels from home to home

Question: The Junk buyers Company travels from home to home, looking for opportunities to buy items that would otherwise be put out with the garbage, but which the company can resell or recycle. Which will be larger, the ...

Question suppose a city releases 16 million gallons of raw

Question: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits in ...

Question a house was bought for 200000 using a 20 year

Question: A house was bought for $200,000 using a 20 year mortgage at 12% interest rate. After the 120th payment it was refinanced with 6% interest rate mortgage for 10 years. What is the reduction in monthly payments? T ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As