Hawking stated that the time horizon is the boundary that separates a black hole from other celestial bodies. Īlso, in terms of physics, the term "time horizon" is also synonymous with event horizon, first identified in Stephen Hawking's A Brief History of Time. The short run does not refer to a specific duration. face different time horizons as a function of different economic. One attempt to bring about a global simultaneous policy is being attempted by the International Simultaneous Policy Organization's SIMPOL campaign. In economics, it expresses the idea that an economy behaves differently depending on the length of time it has to react to certain stimuli. There is no single or standard definition of the term time horizon and no agreement on. Achieving simultaneous policy is quite difficult without an agreement, as those taking action early may be seriously disadvantaged in competition with those taking action late on a regulatory matter. The Forestry Commission in the UK plans over a century into the future.Īgreeing on a common time horizon for action is particularly important in global policy, as each participant will have very different time horizon habits.
Thirty years is often used in mortgage contracts and US Treasury bonds such as the "long bond". More far-sighted companies and government agencies may also use between ten and one hundred years. The time horizon is the period over which the costs and effects of the intervention and comparators are calculated. The most common horizons used in planning are one "quarter" (a quarter year, or three months), a year, two years, three years, four years (especially in a representative democracy where this is a quite common term of office and election cycle) and five years (in corporate planning). No scenario analysis or mark to future activities are usually undertaken for such short periods, except for very large portfolios. A time horizon is a physical impossibility in the real world.Īlthough short term horizons such as end of day, end of week, end of month matter in accounting, generally it is mere summing-up and the simplest mark to market processes that take place at these short term horizons. It is necessary in an accounting, finance or risk management regime to assign such a fixed horizon time so that alternatives can be evaluated for performance over the same period of time. JSTOR ( February 2017) ( Learn how and when to remove this template message)Ī time horizon, also known as a planning horizon, is a fixed point of time in the future at which point certain processes will be evaluated or assumed to end.Unsourced material may be challenged and removed. Please help improve this article by adding citations to reliable sources. York York Health Economics Consortium 2016.This article needs additional citations for verification. In modelling terms, this may require projection forward of current health states and costs of care estimating transitions between health states and associated health outcomes and costs at time points over the period, as well as discounting of future costs and health outcomes. Use of a long-term time horizon is likely to involve extrapolating cohort experience into the future and making assumptions about continued efficacy of interventions. A lifetime horizon is preferred by UK NICE, although it may be useful in sensitivity analysis to test out intermediate time-horizons of 5 to 10 years, for which there may be more robust data. The same time horizon should be used for both costs and health outcomes. A shorter time horizon may be appropriate for some acute conditions, for which long-term consequences are less important.
These showed that exogenously vary- ing the time horizon affected inter. Longer time horizons are applicable to chronic conditions associated with on-going medical management, rather than a cure. Early experiments in psychology had a particularly important impact on economics. The choice of time horizon is an important decision for economic modelling, and depends on the nature of the disease and intervention under consideration and the purpose of the analysis. The time horizon used for an economic evaluation is the duration over which health outcomes and costs are calculated.
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