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Households¡¯ Willingness to Pay for Community Based Health Insurance Scheme: in Kewiot and EfratanaGedem Districts of Amhara Region, Ethiopia

Eshetu Mamo () and Getamesay Bekele ()

Business and Economic Research, 2017, vol. 7, issue 2, 212-233

Abstract: The purpose of this study is to examine determinants of Rural Households¡¯ Willingness to pay (WTP) for Community Based Health Insurance Scheme, in Kewiot and EfratanaGedem districts of Amhara region, Ethiopia. A cross-sectional design that followed a quantitative approach was used. Pre-tested structural and interviewer administered questionnaire was used to collect the desired data. A total of 392 sample rural households were taken by systematic random method. The contingent valuation method of double bounded dichotomous choice format (with calibration strategy) is applied to elicit households¡¯ willingness to pay for the scheme. An interval regression model is used to estimate the mean willingness to pay and to explore the degree of association between predicted WTP and predictor variables. Households¡¯ WTP for the scheme is found significantly associated with factor variables such as gender, education status, family size, level of awareness about the scheme, respondents¡¯ trust in the scheme management, family ill health experience, households¡¯ perceptions on health service quality, and their annual income level. The mean WTP amount is found 211ETB ($10.5) per annum per household. The result clearly shows that 79 % rural households are willing to pay for the scheme. Therefore, despite these factors affecting the rural households¡¯ WTP, there is a potential demand for the community based health insurance scheme. We suggest that, among others, to improve the quality of health care and to build up community awareness and trust on the scheme management have paramount to enhance households¡¯ WTP and hence, to expand health insurance coverage.

Keywords: Community Based Health Insurance; Willingness to Pay; Double Bounded; Calibration Strategy; Ethiopia (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:mth:ber888:v:7:y:2017:i:2:p:212-233