On Inferring Demand for Health Care in the Presence of Anchoring, Acquiescence, and Selection Biases

Jay Bhattacharya and Adam Isen

No 13865, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the contingent valuation literature, both anchoring and acquiescence biases pose problems when using an iterative bidding game to infer willingness to pay. Anchoring bias occurs when the willingness to pay estimate is sensitive to the initially presented starting value. Acquiescence bias occurs when survey respondents exhibit a tendency to answer 'yes' to questions, regardless of their true preferences. More generally, whenever a survey format is used and not all of those contacted participate, selection bias raises concerns about the representativeness of the sample. In this paper, we estimate students' willingness to pay for student health care at Stanford University while accounting for all of these biases. As there is no cost sharing for students, we assess willingness to pay by having a random sample of students play an online iterative bidding game. Our main results are that (1) demand for student health care is elastic by conventional standards; (2) ignoring anchoring bias would lead to a substantially biased measure of the demand elasticity; (3) there is evidence for acquiescence bias in student answers to the opening question of the iterative bidding game and failure to address this leads to the biased conclusion that demand is inelastic; and (4) standard selection correction methods indicate no bias from selective non-response and newer bounding methods support this conclusion of elastic demand.

JEL-codes: C42 C81 C9 I1 (search for similar items in EconPapers)
Date: 2008-03
New Economics Papers: this item is included in nep-hea
Note: EH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Jay Bhattacharya & Adam Isen, 2009. "On Inferring Demand for Health Care in the Presence of Anchoring and Selection Biases," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 12(2).

Downloads: (external link)
http://www.nber.org/papers/w13865.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13865

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13865

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().