Limited dependent variables in willingness to pay studies: applications in health care

Cam Donaldson, Andrew Jones, Tracy Mapp and Jan Abel Olson

Applied Economics, 1998, vol. 30, issue 5, 667-677

Abstract: The appropriate technique for econometric analysis of WTP (willingness to pay) data is an issue which has not been addressed in many studies of WTP for health and health care. This paper argues that, whether an open-ended question or a payment scale approach is adopted, the way in which WTP is recorded means that limited dependent variable models are more appropriate than standard regression analysis. Data from an open ended question on WTP for maternity care contain a large proportion of zeros and the evidence suggests that a two-part specification performs better than OLS or a standard Tobit model. If the payment scale method is adopted, our argument suggests that grouped data regression is an appropriate econometric technique. In practice, with data from a study in Northern Norway, the results from OLS and grouped data regression are broadly similar.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/000368498325651 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:30:y:1998:i:5:p:667-677

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/000368498325651

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().