Discounted values over time

Source: R/discount.R

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 $$1/(1 + d)^{y}$$

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)
#> [1] 8.349456