"Institutionalization Aversion" and the Willingness to Pay for Home Health Care

Joan Costa-i-Font
Authors registered in the RePEc Author Service: Joan Costa-i-Font

No 6703, CESifo Working Paper Series from CESifo

Abstract: We examine the presence of a systematic preference for independent living at old age which we refer as “institutionalization aversion” (IA). Given that IA is not observable from revealed preferences, we draw on a survey experiment to elicit individuals’ willingness to pay (WTP) to avoid institutionalization (e.g., in a nursing home), using a double-bounded referendum WTP format. Our results suggest robust evidence of IA and reveal a willingness to pay of up to 16% of respondent’s (individuals over fifty-five years of age) average income. We find that estimates of the willingness to pay to avoid institutionalization (or €292 at the time of the study) exceed the amount respondents are willing to pay for home health care at old age in the event of a mild impairment (€222). WTP estimates vary with income, age and especially, respondents’ housing conditions. Finally, we test the sensitivity of our estimates to anchoring effects and ‘yea-saying’ biases.

Keywords: institutionalisation aversion; state-dependent preferences; home health care; willingness to pay; caregiving; referendum format (search for similar items in EconPapers)
JEL-codes: I18 R21 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-age, nep-dcm, nep-exp, nep-hea and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Journal Article: “Institutionalization aversion” and the willingness to pay for home health care (2017)
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