Is Regret Theory an alternative basis for estimating the value of healthcare interventions?

This paper presents an argument for the existence of "regret' influencing the valuation of alternative outcomes when making treatment decisions in healthcare. It is argued that valuation techniques as currently formulated rely upon the axioms of Expected Utility Theory (transitivity and independence). This potentially leads to a misrepresentation of the respondents true preferences over treatment alternatives, and thus results in the potential for "irrational' decisions being observed. A modified version of Regret Theory is outlined, and the results of a tentative empirical analysis provided to illustrate the importance of accounting for regret in the valuation of health states. It is concluded that regret is an important element in individual valuation and decision making in health care.