The application of CVM for assessing the tele-health system: an analysis of the discrepancy between WTP and WTA based on survey data

This paper analyzes the applicability of CVM (Contingent Valuation Method) for the economic assessment of the tele-health system. By focusing on the discrepancy between WTP (Willingness to pay) and WTA (Willingness to accept), we decompose the discrepancy into income and endowment effect according to the method used by Morrison [21, 22]. We also closely examine the endowment effect, and break it down into several components. It is noted that the portion, which was thought to be the endowment effect, contains imaginary as well as subsidy biases, and the endowment effect is not as large as previously estimated.

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

[2]  G. C. Morrison.  Understanding the disparity between WTP and WTA: endowment effect, substitutability, or imprecise preferences? , 1998 .

[3]  Robert Cameron Mitchell,et al.  Using Surveys to Value Public Goods: The Contingent Valuation Method , 1989 .

[4]  Jack L. Knetsch,et al.  Environmental policy implications of disparities between willingness to pay and compensation demanded measures of values , 1990 .

[5]  J. Knetsch,et al.  Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value , 1984 .

[6]  D. Brookshire,et al.  Valuing Increments and Decrements in Natural Resource Service Flows , 1980 .

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

[8]  John R. Stoll,et al.  Consumer's Surplus in Commodity Space , 1980 .

[9]  Richard C. Bishop,et al.  Measuring Values of Extramarket Goods: Are Indirect Measures Biased? , 1979 .

[10]  H. Luft,et al.  Willingness to pay for poison control centers. , 1997, Journal of health economics.

[11]  M. Johannesson,et al.  Willingness to pay for antihypertensive therapy--further results. , 1993, Journal of health economics.

[12]  W. Kip Viscusi,et al.  Utility Functions That Depend on Health Status: Estimates and Economic Implications , 1990 .

[13]  M. Johannesson,et al.  The Validity of QALYs , 1997, Medical decision making : an international journal of the Society for Medical Decision Making.

[14]  G. Torrance.  Measurement of health state utilities for economic appraisal. , 1986, Journal of health economics.

[15]  W. Michael Hanemann,et al.  Willingness To Pay and Willingness To Accept: How Much Can They Differ? Comment , 2003 .

[16]  J. Knetsch.  The Endowment Effect and Evidence of Nonreversible Indifference Curves. , 1989 .

[17]  A. Tversky,et al.  Prospect Theory : An Analysis of Decision under Risk Author ( s ) : , 2007 .

[18]  G. C. Morrison,et al.  Willingness to pay and willingness to accept: some evidence of an endowment effect , 1997 .

[19]  A. Tversky,et al.  Prospect theory: analysis of decision under risk , 1979 .

[20]  M. Shechter,et al.  Contingent Valuation of Supplemental Health Care in Israel , 1993, Medical decision making : an international journal of the Society for Medical Decision Making.

[21]  Masatsugu Tsuji,et al.  An Estimation of Economic Effects of Tele-home-care: Hospital Cost-savings of the Elderly , 2001, MedInfo.

[22]  David S. Brookshire,et al.  An experiment on the economic value of visibility , 1980 .

[23]  C. Donaldson,et al.  Willingness to pay for publicly-provided goods. A possible measure of benefit? , 1990, Journal of health economics.

[24]  P. Shackley,et al.  Using willingness to pay to value close substitutes: carrier screening for cystic fibrosis revisited. , 1997, Health economics.

[25]  D. Kahneman,et al.  Experimental Tests of the Endowment Effect and the Coase Theorem , 1990, Journal of Political Economy.

[26]  A Gafni,et al.  Willingness-to-pay as a measure of benefits. Relevant questions in the context of public decisionmaking about health care programs. , 1991, Medical care.

[27]  J. A. Sinden,et al.  The Persistence of Evaluation Disparities , 1987 .

[28]  Robert Fabian,et al.  Valuing health for policy : an economic approach , 1995 .

[29]  M. Johannesson,et al.  Willingness to Pay for Reductions in Angina Pectoris Attacks , 1996, Medical decision making : an international journal of the Society for Medical Decision Making.