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Sensitivity of Willingness to Pay Estimates to the Level of Attributes in Discrete Choice Experiments

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  • Ryan, Mandy
  • Wordsworth, Sarah
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    Abstract

    This paper considers issues raised in the application of discrete choice experiments (DCEs) to estimating willingness to pay (WTP). The main issue addressed is the sensitivity of WTP estimates to the level of attributes. A DCE, concerned with preferences for alternative cervical screening programmes, was carried out with women in the Tayside area of Scotland. A split sample design was employed in which respondents were divided into two groups. Each group received a discrete choice questionnaire that varied with respect to the levels of three of the six attributes. The price attribute was one of the attributes that varied across questionnaires. Whilst estimated coefficients were not significantly different across five of the six attributes included in the experiment, mean WTP estimates were significantly different for four of the five welfare estimates. However, from a policy point of view, such a difference may not be important. Consideration is also given to other general methodological and policy issues that are raised when using DCEs to estimate WTP. The findings suggest the need for further research into the design and application of DCEs as a method for estimating WTP. Copyright 2000 by Scottish Economic Society.

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    Bibliographic Info

    Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

    Volume (Year): 47 (2000)
    Issue (Month): 5 (November)
    Pages: 504-24

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    Handle: RePEc:bla:scotjp:v:47:y:2000:i:5:p:504-24

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    Cited by:
    1. Emily Lancsar & Elizabeth Savage, 2004. "Deriving welfare measures from discrete choice experiments: inconsistency between current methods and random utility and welfare theory," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 901-907.
    2. Philips, Hilde & Mahr, Dominik & Remmen, Roy & Weverbergh, Marcel & De Graeve, Diana & Van Royen, Paul, 2012. "Predicting the place of out-of-hours care—A market simulation based on discrete choice analysis," Health Policy, Elsevier, vol. 106(3), pages 284-290.
    3. Mandy Ryan, 2004. "A comparison of stated preference methods for estimating monetary values," Health Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 291-296.
    4. Harry Telser & Karolin Becker & Peter Zweifel, 2004. "Validity and Reliability of Willingness-to-Pay Estimates: Evidence from Two Overlapping Discrete-Choice Experiments," SOI - Working Papers 0412, Socioeconomic Institute - University of Zurich, revised Mar 2008.
    5. Godager, Geir, 2012. "Birds of a feather flock together: A study of doctor–patient matching," Journal of Health Economics, Elsevier, vol. 31(1), pages 296-305.
    6. Stirling Bryan & Paul Dolan, 2004. "Discrete choice experiments in health economics," The European Journal of Health Economics, Springer, vol. 5(3), pages 199-202, September.
    7. Brigitte Essers & Debby Helvoort-Postulart & Martin Prins & Martino Neumann & Carmen Dirksen, 2010. "Does the Inclusion of a Cost Attribute Result in Different Preferences for the Surgical Treatment of Primary Basal Cell Carcinoma?," PharmacoEconomics, Springer, vol. 28(6), pages 507-520, June.
    8. Högberg, Martina, 2007. "Eco-driving? A discrete choice experiment on valuation of car attributes," Working Papers 2007:13, Swedish National Road & Transport Research Institute (VTI).
    9. Lynd Bacon & Peter Lenk, 2012. "Augmenting discrete-choice data to identify common preference scales for inter-subject analyses," Quantitative Marketing and Economics, Springer, vol. 10(4), pages 453-474, December.
    10. Nick Hanley & Mandy Ryan & Robert Wright, 2003. "Estimating the monetary value of health care: lessons from environmental economics," Health Economics, John Wiley & Sons, Ltd., vol. 12(1), pages 3-16.
    11. Alessandro Mengoni & Chiara Seghieri & Sabina Nuti, 2013. "The application of discrete choice experiments in health economics: a systematic review of the literature," Working Papers 201301, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
    12. Yao, Richard T. & Scarpa, Riccardo & Turner, James A. & Barnard, Tim D. & Rose, John M. & Palma, João H.N. & Harrison, Duncan R., 2014. "Valuing biodiversity enhancement in New Zealand's planted forests: Socioeconomic and spatial determinants of willingness-to-pay," Ecological Economics, Elsevier, vol. 98(C), pages 90-101.
    13. Harry Telser & Karolin Becker & Peter Zweifel, 2008. "Validity and Reliability of Willingness-to-Pay Estimates," The Patient: Patient-Centered Outcomes Research, Springer, vol. 1(4), pages 283-298, October.
    14. Hanley, Nick & Adamowicz, Wiktor & Wright, Robert E., 2005. "Price vector effects in choice experiments: an empirical test," Resource and Energy Economics, Elsevier, vol. 27(3), pages 227-234, October.
    15. Emily Lancsar, 2002. "Deriving welfare measures from stated preference discrete choice modelling experiments, CHERE Discussion Paper No 48," Discussion Papers 48, CHERE, University of Technology, Sydney.
    16. Angela Robinson & Judith Covey & Anne Spencer & Graham Loomes, 2007. "Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment," Working Papers 597, Queen Mary, University of London, School of Economics and Finance.
    17. Marit Kragt, 2013. "The Effects of Changing Cost Vectors on Choices and Scale Heterogeneity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(2), pages 201-221, February.
    18. Ladenburg, Jacob & Olsen, Søren Bøye, 2008. "Gender-specific starting point bias in choice experiments: Evidence from an empirical study," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 275-285, November.
    19. William Fonta & H. Ichoku & Jane Kabubo-Mariara, 2010. "The effect of protest zeros on estimates of willingness to pay in healthcare contingent valuation analysis," Applied Health Economics and Health Policy, Springer, vol. 8(4), pages 225-237, July.

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