discount: Discounted values over time

In Health-Economics-in-R/QALY: Calculate Quality Adjusted Life Years (QALYs) Gains with Discounting and Inflated Costs

Description

Dscounted value, e.g. cost or health (QALY), for each time point, e.g. year. E.g. a QALY in the future is worth less to us now because of 'interest' or conversely we'd need more QALYs now to have a QALY further in the future.

Formula used is

1/(1 + d)^{y}

Usage

discount(discount_rate = 0.035, t_limit = 100)

Arguments

discount_rate	Discount factor, default at 3.5%
t_limit	Time period (positive integer) to discount over starting from 1

Value

Discounted value for each time point up to t_limit

References

Severens, Johan L and Milne, Richard J, Value in Health, 4, Discounting Health Outcomes in Economic Evaluation : The Ongoing Debate, volume 7, 2004

See Also

excess_lifetime is the sum of discounted terms.

Examples

D <- discount(t_limit = 10)
utility <- 0.97

# Discounted QALYs upto 10 years
sum(utility * D)

Health-Economics-in-R/QALY documentation built on Oct. 26, 2020, 2:28 a.m.