OBJECTIVES:The recommendation of the US Panel to incorporate productivity costs in terms of health effects (QALYs) in a cost-effectiveness analysis aroused quite some debate. A crucial yet under-explored question in this debate is whether people include effects of ill-health on income in health state valuations (HSV). The same holds for the actual inclusion in HSV of the effects of ill-health on leisure. This study aims to test whether respondents to health-state valuations using TTO questions include the effects of ill-health on income and leisure when the measure is silent on both. Moreover, it tests the consequences of explicit instructions to either include or exclude the income-effects in HSV. METHODS: Three questionnaires were developed and administered among the general public. Respondents were asked to value three distinct EQ-5D health-states using TTO. In version 1 respondents did not receive instructions on including or excluding income-effects in their valuations, but inclusion was assessed afterwards. In versions 2 and 3 respondents were instructed upfront to incorporate income-effects or to assume that income would not change. They were furthermore asked whether they included the effects of ill-health on leisure-time in their HSV. RESULTS: In version 1 64% of the respondents spontaneously included income-effects in their HSV. In version 2 and 3 88% included leisure-time. There were no differences in the valuations of respondents including or excluding income-effects, also in case of explicit instruction. Inclusion of leisure-time resulted in a significantly lower TTO-value in only one of the three health-states. CONCLUSIONS: Respondents do not consistently include income- and leisure-effects in their valuations. Including income-effects (spontaneously or instructed) does not seem to affect TTO-valuations and may therefore best be placed on the cost-side of the cost-effectiveness ratio. Leisure-time may be more influential, but more research is needed to ensure appropriate consideration and valuation of leisure.