Analyzing the determinants of willingness-to-pay values for testing the validity of the contingent valuation method. Application to home care compared to hospital care

Raphaël Remonnay (), Nathalie Havet (), Magali Morelle () and Marie-Odile Carrère ()
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Raphaël Remonnay: GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France
Magali Morelle: GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France
Marie-Odile Carrère: GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France

No 820, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: The contingent valuation (CV) method is an attractive approach for comparing home care to hospital care in which the only difference is patients’ well-being during the treatment process and not health outcomes. We considered the empirical situation of blood transfusion (BT) in cancer patients and collected willingness to pay (WTP) values among BT users. Our main objective was to test the validity of the CV method, namely its ability to elicit true preferences. Firstly, possible determinants of WTP values and their expected influences were identified, from both economic and non economic literature and from the findings of a pilot study. Secondly, they were compared to predicted influences resulting from appropriate econometric analysis of WTP values elicited by a bidding process. From the health economics literature it appeared that the double-hurdle model is the most appropriate approach to account for zero values and protest responses. However, because the number of protest responses was too small, we used a truncated regression model. None of the 7 hypothesized influences was invalidated by econometric results. The anchoring bias hypothesis was confirmed. The WTP for home BT compared to hospital BT increased with household income, with previous experience of home care, with living far from the hospital and with low quality of life. Conversely, it was lower for advanced-stage (palliative or terminal) than for early-stage (curative) patients. We conclude that the CV approach is acceptable to severely ill patients. Moreover, WTP values demonstrate good validity given that influences predicted by our model are consistent with expected determinants.

Keywords: contingent valuation; validity; protest responses; censored data; home care (search for similar items in EconPapers)
JEL-codes: I1 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2008
New Economics Papers: this item is included in nep-dcm
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Citations: View citations in EconPapers (3)

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Working Paper: Analyzing the determinants of willingness-to-pay values for testing the validity of the contingent valuation method. Application to home care compared to hospital care (2008)
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