Estimating the monetary value of health care: lessons from environmental economics.

In the recent past, considerable effort in health economics has been made on applying stated preference methods such as contingent valuation and choice experiments. Despite this increased use, there is still considerable scepticism concerning the value of these approaches. The application of contingent valuation in environmental economics has a long history and has been widely accepted. Whilst choice experiments were introduced to the environmental and health economics literature at a similar time, the wider acceptance of monetary measures of benefit in environmental economics has meant that they have also been more widely applied. The purpose of this paper is to identify some of the key issues and debates that have taken place in the environmental economics literature, summarise the state of the art with respect to these issues, and consider how health economists have addressed these issues. Important areas for future research in health economics are identified.

[1]  Marisa J. Mazzotta,et al.  Decision Making When Choices Are Complex: A Test of Heiner's Hypothesis , 1995 .

[2]  M. Ryan.  Using willingness to pay to assess the benefits of assisted reproductive techniques. , 1996, Health economics.

[3]  Kristin Magnussen,et al.  Benefit transfer: testing for accuracy and reliability , 2002 .

[4]  David A. Elston,et al.  An application of economic choice experiments to a traditional land use - deer hunting and landscape change in the Scottish highlands. , 1998 .

[5]  M. Johannesson,et al.  Willingness to pay for antihypertensive therapy--results of a Swedish pilot study. , 1991, Journal of health economics.

[6]  W. Michael Hanemann,et al.  Valuing the Environment through Contingent Valuation , 1994 .

[7]  Richard T. Carson,et al.  Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods , 1995 .

[8]  Sarah Wordsworth,et al.  Sensitivity of Willingness to Pay Estimates to the Level of Attributes in Discrete Choice Experiments , 2000 .

[9]  B. Álvarez-Farizo.  Estimating the Benefits of Agri-environmental Policy: Econometric Issues in Open-ended Contingent Valuation Studies , 1999 .

[10]  W. Michael Hanemann,et al.  Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation , 1991 .

[11]  M Johannesson,et al.  Valuation of health changes with the contingent valuation method: a test of scope and question order effects. , 1996, Health economics.

[12]  D. Mcleod,et al.  Willingness-to-Pay Estimates Using the Double-Bounded Dichotomous-Choice Contingent Valuation Format: A Test for Validity and Precision in a Bayesian Framework , 1999 .

[13]  Robert P. Berrens,et al.  Contingent values for New Mexico instream flows : With tests of scope, group-size reminder and temporal reliability , 2000 .

[14]  I. Bateman,et al.  The Axford Debate Revisited: A Case Study Illustrating Different Approaches to the Aggregation of Benefits Data , 2000 .

[15]  N. Hanley,et al.  Estimating the Value of Environmental Features: Stage Two. Final Report to MAFF. , 2001 .

[16]  M. Ryan,et al.  Valuing health care using willingness to pay: a comparison of the payment card and dichotomous choice methods. , 2004, Journal of health economics.

[17]  N. Hanley.  Cost — Benefit Analysis and Environmental Policymaking , 2001 .

[18]  Edward J. Balistreri,et al.  Can Hypothetical Questions Reveal True Values? A Laboratory Comparison of Dichotomous Choice and Open-Ended Contingent Values with Auction Values , 2001 .

[19]  F. Johnson,et al.  Willingness to pay for improved respiratory and cardiovascular health: a multiple-format, stated-preference approach. , 2000, Health economics.

[20]  Richard C. Bishop,et al.  Which Response Format Reveals the Truth about Donations to a Public Good , 1996 .

[21]  M. Sagoff,et al.  The Economy of the Earth: Acknowledgments , 2007 .

[22]  Nick Hanley.  Ethical Beliefs and Behaviour in Contingent Valuation Surveys , 1996 .

[23]  C. Donaldson,et al.  Helicopters, hearts and hips: using willingness to pay to set priorities for public sector health care programmes. , 1998, Social science & medicine.

[24]  I. Bateman,et al.  Non-users' Willingness to Pay for a National Park: An Application and Critique of the Contingent Valuation Method , 1997 .

[25]  J Hutton,et al.  A nice challenge for health economics. , 2000, Health economics.

[26]  Jean C. Buzby,et al.  Differences between continuous and discrete contingent value estimates , 1996 .

[27]  D. Wise,et al.  A CONDITIONAL PROBIT MODEL FOR QUALITATIVE CHOICE: DISCRETE DECISIONS RECOGNIZING INTERDEPENDENCE AND HETEROGENEOUS PREFERENCES' , 1978 .

[28]  J. Louviere,et al.  Combining Revealed and Stated Preference Methods for Valuing Environmental Amenities , 1994 .

[29]  Daniel Kahneman,et al.  Valuing public goods: The purchase of moral satisfaction , 1992 .

[30]  N. Hanley,et al.  Preferences, information and biodiversity preservation , 1995 .

[31]  N. Hanley,et al.  Evaluating alternative "countermeasures" against food contamination resulting from nuclear accidents , 2001 .

[32]  J. Louviere,et al.  Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation , 1998 .

[33]  Angela Bate,et al.  Testing the assumptions of rationality, continuity and symmetry when applying discrete choice experiments in health care , 2001 .

[34]  Barbara Kanninen,et al.  Bias in Discrete Response Contingent Valuation , 1995 .

[35]  M Ryan,et al.  Methodological issues in the application of conjoint analysis in health care. , 1998, Health economics.

[36]  A Gafni,et al.  Health care contingent valuation studies: a review and classification of the literature. , 1998, Health economics.

[37]  M Ryan,et al.  Eliciting public preferences for healthcare: a systematic review of techniques. , 2001, Health technology assessment.

[38]  P. Frykblom,et al.  Hypothetical Question Modes and Real Willingness to Pay , 1997 .

[39]  Roy Brouwer,et al.  Environmental value transfer: state of the art and future prospects , 2000 .

[40]  John B. Loomis,et al.  Testing a meta-analysis model for benefit transfer in international outdoor recreation , 2001 .

[41]  Cam Donaldson,et al.  Validity of open-ended and payment scale approaches to eliciting willingness to pay , 1997 .

[42]  D. Macmillan,et al.  A Field Experiment Involving Cash and Hypothetical Charitable Donations , 1999 .

[43]  Richard Cookson,et al.  Effect of discussion and deliberation on the public's views of priority setting in health care: focus group study , 1999, BMJ.

[44]  I. Ajzen,et al.  Understanding Attitudes and Predicting Social Behavior , 1980 .

[45]  Magnus Johannesson,et al.  Hypothetical versus real willingness to pay in the health care sector: results from a field experiment. , 2001 .

[46]  J. Shogren,et al.  Cvm‐X: Calibrating Contingent Values with Experimental Auction Markets , 1998 .

[47]  Ian J. Bateman,et al.  Does Part-Whole Bias Exist? An Experimental Investigation , 1997 .

[48]  Graham Loomes,et al.  VALUING THE PREVENTION OF NON-FATAL ROAD INJURIES: CONTINGENT VALUATION VS. STANDARD GAMBLES , 1995 .

[49]  K. Ward,et al.  Natural Resource Damages: Law and Economics , 1992 .

[50]  J. Bennett,et al.  Yea-Saying in Contingent Valuation Surveys , 1999 .

[51]  Russell Blamey,et al.  Choice Modeling and Tests of Benefit Transfer , 2002 .

[52]  Peter Martinsson,et al.  Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment , 2001 .

[53]  K. Train.  Recreation Demand Models with Taste Differences Over People , 1998 .

[54]  T Klose,et al.  The contingent valuation method in health care. , 1999, Health policy.

[55]  A. Scott,et al.  Patients, Doctors and Contracts: An Application of Principal-Agent Theory to the Doctor-Patient Relationship , 1999 .

[56]  M. Weinstein,et al.  What Do Patients Value?: Willingness to Pay for Ultrasound in Normal Pregnancy , 1985, Medical care.

[57]  Ian J. Bateman,et al.  Real And Hypothetical Willingness To Pay For Environmental Preservation: A Non‐Experimental Comparison , 1997 .

[58]  Nicholas E. Flores,et al.  The Theory and Measurement of Passive‐Use Value , 2001 .

[59]  Gary Koop,et al.  Modelling Recreation Demand Using Choice Experiments: Climbing in Scotland , 2002 .

[60]  M. Ryan.  Using conjoint analysis to take account of patient preferences and go beyond health outcomes: an application to in vitro fertilisation. , 1999, Social science & medicine.

[61]  J. Hausman,et al.  Contingent Valuation: Is Some Number Better than No Number? , 1994 .

[62]  M. Ryan,et al.  Using choice experiments to value health care programmes: current practice and future challenges , 2001 .

[63]  M Ryan,et al.  Response-ordering effects: a methodological issue in conjoint analysis. , 1999, Health economics.

[64]  Frank A. Ward,et al.  Valuing Nature with Travel Cost Models , 2000 .

[65]  J. Bennett,et al.  The choice modelling approach to environmental valuation , 2001 .