Person-time, willingness-to-pay, time trade-off and discounting MCQs With Answer

Introduction

This quiz set focuses on four core concepts in pharmacoepidemiology and pharmacoeconomics: person-time, willingness-to-pay (WTP), time trade-off (TTO), and discounting. It is designed for M.Pharm students preparing for advanced exams and practical evaluations. The questions probe definitions, assumptions, calculation methods, interpretation of rates and utilities, and implications for health economic evaluations. Through a mix of conceptual and calculation items, you will consolidate understanding of incidence measures using person-time, methods for eliciting value of health gains (WTP and TTO), and the role of discounting in cost and outcome comparisons. Answers are provided so you can self-assess and deepen your mastery.

Q1. What does the epidemiological measure “person-time” represent?

• The cumulative number of individuals enrolled in a study regardless of follow-up duration
• The sum of the periods of time that each individual in the study is observed and at risk
• An adjusted prevalence estimate accounting for age and sex
• The proportion of participants who developed the outcome during follow-up

Correct Answer: The sum of the periods of time that each individual in the study is observed and at risk

Q2. When is the use of person-time incidence rate preferred over cumulative incidence?

• When all participants are followed for exactly the same fixed duration
• When follow-up time varies and there is censoring or loss to follow-up
• Only for cross-sectional studies to estimate prevalence
• When the outcome is common and instantaneous

Correct Answer: When follow-up time varies and there is censoring or loss to follow-up

Q3. Calculate the incidence rate per 1,000 person-years: 10 events occurred during 500 person-years of follow-up.

• 0.02 per 1,000 person-years
• 2 per 1,000 person-years
• 20 per 1,000 person-years
• 200 per 1,000 person-years

Correct Answer: 20 per 1,000 person-years

Q4. A cohort of 200 patients contributes a total of 1,000 person-years; 50 events were observed. What is the incidence rate per 100 person-years?

• 0.05 per 100 person-years
• 5 per 100 person-years
• 50 per 100 person-years
• 500 per 100 person-years

Correct Answer: 5 per 100 person-years

Q5. Which assumption is essential when interpreting person-time incidence rates?

• The hazard is constant over time for the population measured
• The total number of participants must be equal across comparison groups
• All events must occur at the end of follow-up
• Loss to follow-up cannot occur

Correct Answer: The hazard is constant over time for the population measured

Q6. Willingness-to-pay (WTP) in health economics primarily measures:

• The maximum amount a payer will reimburse an intervention irrespective of health gain
• The monetary value an individual or society places on a health improvement or risk reduction
• The fixed price set by regulatory agencies for new drugs
• The production cost plus markup required to supply a medicine

Correct Answer: The monetary value an individual or society places on a health improvement or risk reduction

Q7. Which method is a stated-preference technique commonly used to elicit WTP for health outcomes?

• Revealed preference from market purchases
• Contingent valuation survey presenting hypothetical scenarios
• Time motion study of healthcare workers
• Clinical trial cost collection

Correct Answer: Contingent valuation survey presenting hypothetical scenarios

Q8. A study elicits individual WTP for a new vaccine and reports a median WTP of $30 per dose. Which interpretation is most accurate?

• Society’s optimal funding threshold for the vaccine is $30 per dose
• Half the surveyed respondents are willing to pay at least $30 for the dose
• Every individual in the population values the vaccine at exactly $30
• WTP equals the market price set by manufacturers

Correct Answer: Half the surveyed respondents are willing to pay at least $30 for the dose

Q9. Which is a major limitation of WTP elicitation in health settings?

• It directly measures clinical effectiveness instead of preferences
• Responses can be influenced by ability to pay, leading to equity concerns
• It provides precise, objective costs from markets for all health goods
• WTP is invariant across different elicitation formats

Correct Answer: Responses can be influenced by ability to pay, leading to equity concerns

Q10. The Time Trade-Off (TTO) method is used to measure:

• Monetary compensation individuals require to accept a risk
• Health-related quality of life in utility units by trading quantity of life for quality
• The time needed for a drug to reach market approval
• Production time required for large-scale vaccine manufacture

Correct Answer: Health-related quality of life in utility units by trading quantity of life for quality

Q11. In a TTO task, a respondent would be indifferent between living 10 years in health state X and living 8 years in full health. What is the utility of health state X?

• 0.8
• 1.25
• 0.2
• 0.8 years

Correct Answer: 0.8

Q12. Which characteristic distinguishes TTO from standard gamble (SG) approaches?

• TTO elicits preferences based on mortality risk only
• TTO involves trading time in health states rather than taking probabilistic gambles
• TTO requires monetary payments during the survey
• TTO can only be applied to acute illnesses, not chronic

Correct Answer: TTO involves trading time in health states rather than taking probabilistic gambles

Q13. Which factor can bias TTO utility estimates downward (toward lower utilities)?

• Using long-duration frames that exaggerate adaptation to the health state
• Respondent risk-seeking preferences
• Discounting future life years when respondents prefer present years strongly
• Framing the TTO as a gain rather than a loss has no effect

Correct Answer: Discounting future life years when respondents prefer present years strongly

Q14. In health economic evaluations, discounting is applied to future costs and outcomes because:

• Future outcomes are always more valuable than current outcomes
• Societal time preference and opportunity cost make future benefits and costs worth less today
• Discounting inflates long-term benefits to favor preventive interventions
• It removes the need to model long-term outcomes explicitly

Correct Answer: Societal time preference and opportunity cost make future benefits and costs worth less today

Q15. Using an annual discount rate of 3%, what is the present value (PV) of 1 QALY received 5 years from now?

• 0.8638 QALYs
• 0.9500 QALYs
• 0.7400 QALYs
• 1.1500 QALYs

Correct Answer: 0.8638 QALYs

Q16. Two interventions: A costs $2,000 and yields 4 QALYs now; B costs $3,000 and yields 5 QALYs in 3 years. Using 5% annual discounting for QALYs only, which statement is true about discounted QALYs for B?

• Discounted QALYs for B are greater than 5
• Discounted QALYs for B are equal to 5 because future QALYs are not discounted
• Discounted QALYs for B are approximately 4.33 QALYs
• Discounted QALYs for B cannot be computed without cost discounting

Correct Answer: Discounted QALYs for B are approximately 4.33 QALYs

Q17. Which expression gives the present value (PV) of a future amount X received t years later with annual discount rate r (discrete compounding)?

• PV = X * (1 + r)^t
• PV = X / (1 + r)^t
• PV = X * e^(r*t)
• PV = X / (1 – r*t)

Correct Answer: PV = X / (1 + r)^t

Q18. What is the main consequence of choosing a higher discount rate in cost-effectiveness analysis?

• It increases the present value of future health gains, favoring preventive measures
• It reduces the present value of future costs and benefits, disadvantaging interventions with long-term benefits
• It only affects costs but not health outcomes
• It eliminates uncertainty in projected long-term outcomes

Correct Answer: It reduces the present value of future costs and benefits, disadvantaging interventions with long-term benefits

Q19. Net Monetary Benefit (NMB) is calculated as λ×ΔE − ΔC, where λ is willingness-to-pay per QALY. If ΔE = 0.4 QALY, ΔC = $4,000 and λ = $50,000/QALY, what is the NMB?

• $50,000
• $16,000
• $6,000
• −$6,000

Correct Answer: $16,000

Q20. Which combined approach can help reconcile differences between WTP and preference-based utility measures like TTO when valuing health?

• Rely solely on market prices for all health states
• Use complementary methods: elicit WTP for societal values and TTO for utilities, then perform sensitivity analyses
• Discard TTO and use only revealed preference methods
• Assume WTP equals TTO-derived utilities multiplied by income

Correct Answer: Use complementary methods: elicit WTP for societal values and TTO for utilities, then perform sensitivity analyses

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