If our health changes, it clearly impacts our wellbeing. In our recent study, we found that people would have to be paid £25,000 to compensate for the wellbeing impact of each year lost to very poor health. And this is about equivalent to what the UK government currently spends on health interventions for what it calls ‘Quality Adjusted Life Years’ – essentially, each extra year of perfectly healthy life.

WHAT WE’D PAY FOR ANOTHER YEAR OF QUALITY LIFE

The impact of different medicines or health interventions are estimated in terms of how many ‘Quality Adjusted Life Years’ they can provide. One Quality Adjusted Life Year is an extra year of perfectly healthy life. The rule of thumb that the UK government uses when it buys medicines is that it is willing to pay £25,000 pounds for an extra Quality Adjusted Life Year.

In a recent study, my co-authors and I calculate what the impact would be of another year of perfectly healthy life – so, one Quality Adjusted Life Year – on wellbeing. We found it is equivalent to the effect that £25,000 would have on individual’s wellbeing if those individuals would have to pay that actual amount.

They’d be willing to pay a bit less if they are going to live with a long-term health condition.

HOW DID WE COME UP WITH THAT AMOUNT?

We deduce what individuals would be willing to pay to improve their own health by looking at how satisfied they are with their life when they are very ill versus perfectly healthy. Our data follows almost 20,000 Australians for over 15 years from 2001, who were asked each year how satisfied they were with their life and a large battery of questions about their health.

We use the same measure of health as is used in some of the Quality of Additional Life measurements – that is, a set of 36 questions that ask individuals mainly about aspects of their physical health, including vitality, pain and mobility.

Unsurprisingly, health is extremely important for life satisfaction. Going from perfect health to a ‘zero Quality of Life’ – which is ‘as good as dead’ according to these health measures- reduces life satisfaction on a 0-10 scale by 2.25 in the first year and by 3.02 if it lasts.

This makes health easily the most important single item in life satisfaction: even unemployment, which is terrible for people, only ‘costs’ about one point in life satisfaction.