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Testing the convergent validity of the contingent valuation and travel cost methods in valuing the benefits of health care

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  • Philip M. Clarke

    (Health Economics Research Centre, Institute of Health Sciences, University of Oxford, Oxford OX3 7LF, UK)

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    Abstract

    In this study, the convergent validity of the contingent valuation method (CVM) and travel cost method (TCM) is tested by comparing estimates of the willingness to pay (WTP) for improving access to mammographic screening in rural areas of Australia. It is based on a telephone survey of 458 women in 19 towns, in which they were asked about their recent screening behaviour and their WTP to have a mobile screening unit visit their nearest town. After eliminating missing data and other non-usable responses the contingent valuation experiment and travel cost model were based on information from 372 and 319 women, respectively. Estimates of the maximum WTP for the use of mobile screening units were derived using both methods and compared. The highest mean WTP estimated using the TCM was $83.10 (95% C.I. $99.06-$68.53), which is significantly less than the estimate of $148.09 ($131.13-$166.60) using the CVM. This could be due to the CVM estimates also reflecting non-use values such as altruism, or a range of potential biases that are known to affect both methods. Further tests of validity are required in order to gain a greater understanding of the relationship between these two methods of estimating WTP. Copyright © 2001 John Wiley & Sons, Ltd.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 11 (2002)
    Issue (Month): 2 ()
    Pages: 117-127

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    Handle: RePEc:wly:hlthec:v:11:y:2002:i:2:p:117-127

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Alan Randall, 1994. "Difficulty with the Travel Cost Method," Land Economics, University of Wisconsin Press, vol. 70(1), pages 88-96.
    2. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, Econometric Society, vol. 49(1), pages 105-30, January.
    3. Bengt Kristrom, 1990. "A Non-Parametric Approach to the Estimation of Welfare Measures in Discrete Response Valuation Studies," Land Economics, University of Wisconsin Press, vol. 66(2), pages 135-139.
    4. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, American Economic Association, vol. 84(1), pages 255-70, March.
    5. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 7(4), pages 313-326.
    6. Clarke, Philip M., 1998. "Cost-benefit analysis and mammographic screening: a travel cost approach," Journal of Health Economics, Elsevier, Elsevier, vol. 17(6), pages 767-787, December.
    7. Holmes Thomas P. & Kramer Randall A., 1995. "An Independent Sample Test of Yea-Saying and Starting Point Bias in Dichotomous-Choice Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 121-132, July.
    8. Cauley, Stephen Day, 1987. "The Time Price of Medical Care," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 59-66, February.
    9. Schkade David A. & Payne John W., 1994. "How People Respond to Contingent Valuation Questions: A Verbal Protocol Analysis of Willingness to Pay for an Environmental Regulation," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 88-109, January.
    10. Philip Clarke, 2000. "Valuing the benefits of mobile mammographic screening units using the contingent valuation method," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 32(13), pages 1647-1655.
    11. Carson, Richard T. & Flores, Nicholas E. & Martin, Kerry M. & Wright, Jennifer L., 1995. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," 1995 Conference (39th), February 14-16, 1995, Perth, Australia, Australian Agricultural and Resource Economics Society 148793, Australian Agricultural and Resource Economics Society.
    12. Nyquist, Hans, 1992. "Optimal Designs of Discrete Response Experiments in Contingent Valuation Studies," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 559-63, August.
    13. Culyer, A J, 1971. "The Nature of the Commodity 'Health Care' and Its Efficient Allocation," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 189-211, July.
    14. Richard C. Ready & Jean C. Buzby & Dayuan Hu, 1996. "Differences between Continuous and Discrete Contingent Value Estimates," Land Economics, University of Wisconsin Press, vol. 72(3), pages 397-411.
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    Cited by:
    1. Akbar Marvasti, 2006. "A Contingent Valuation of Customer Delay in Medical Services," Eastern Economic Journal, Eastern Economic Association, vol. 32(1), pages 31-45, Winter.
    2. Urama, Kevin C. & Hodge, Ian D., 2006. "Are stated preferences convergent with revealed preferences? Empirical evidence from Nigeria," Ecological Economics, Elsevier, Elsevier, vol. 59(1), pages 24-37, August.
    3. Jeuland, Marc & Lucas, Marcelino & Clemens, John & Whittington, Dale, 2010. "Estimating the private benefits of vaccination against cholera in Beira, Mozambique: A travel cost approach," Journal of Development Economics, Elsevier, Elsevier, vol. 91(2), pages 310-322, March.
    4. Moger, Tron Anders & Kristiansen, Ivar Sønbø, 2012. "Direct and indirect costs of the Norwegian Breast Cancer Screening Program," HERO On line Working Paper Series, Oslo University, Health Economics Research Programme 2012:3, Oslo University, Health Economics Research Programme.
    5. Borghi, Josephine & Jan, Stephen, 2008. "Measuring the benefits of health promotion programmes: Application of the contingent valuation method," Health Policy, Elsevier, Elsevier, vol. 87(2), pages 235-248, August.
    6. John C. Whitehead & Bruce K. Johnson & Daniel S. Mason & Gordon J. Walker, 2009. "Using Revealed and Stated Preference Data to Estimate the Demand and Consumption Benefits of Sporting Events: An Application to National Hockey League Game Trips," Working Papers, Department of Economics, Appalachian State University 09-13, Department of Economics, Appalachian State University.
    7. Mandy Ryan & Verity Watson, 2009. "Comparing welfare estimates from payment card contingent valuation and discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(4), pages 389-401.
    8. Bernard van den Berg & Ada Ferrer-i-Carbonell, 2007. "Monetary valuation of informal care: the well-being valuation method," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(11), pages 1227-1244.

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