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Economic evaluation of health effects with preference imprecision

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  • Mar�a Xosé Vázquez

    (Department of Applied Economics, University of Vigo, Spain)

  • Jorge E. Ara�a

    (Department of Agricultural & Resource Economics, University of California, Berkeley, USA)

  • Carmelo J. León

    (Department of Applied Economic Analysis, University of Las Palmas de Gran Canaria, Spain)

Abstract

The estimation of economic benefits of health effects through direct methods, such as contingent valuation, presents the problem of preference imprecision. This paper deals with this problem by proposing an elicitation method that allows the subject to state an interval for willingness to pay, without inducing any specific amount as a response. The paper also analyzes the effects of the context where changes in health occur on the associated imprecision level and the estimates, by comparing a situation without context with another in which effects are due to atmospheric pollution. The econometric modelling develops a Bayesian estimation method for censored intervals, which models the existing uncertainty between the lower and upper limits derived from the elicitation process. Results prove that data dispersion is significantly higher for the non-contextual scenario, and increases for the most severe symptoms. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1079
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Bibliographic Info

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

Volume (Year): 15 (2006)
Issue (Month): 4 ()
Pages: 403-417

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Handle: RePEc:wly:hlthec:v:15:y:2006:i:4:p:403-417

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

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  7. Welsh, Michael P. & Poe, Gregory L., 1998. "Elicitation Effects in Contingent Valuation: Comparisons to a Multiple Bounded Discrete Choice Approach," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 170-185, September.
  8. Ready Richard C. & Whitehead John C. & Blomquist Glenn C., 1995. "Contingent Valuation When Respondents Are Ambivalent," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 181-196, September.
  9. Cameron, Trudy Ann & James, Michelle D, 1987. "Efficient Estimation Methods for "Closed-ended' Contingent Valuation Surveys," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 269-76, May.
  10. Champ, Patricia A. & Bishop, Richard C. & Brown, Thomas C. & McCollum, Daniel W., 1997. "Using Donation Mechanisms to Value Nonuse Benefits from Public Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 151-162, June.
  11. Thomas C. Brown & Patricia A. Champ & Richard C. Bishop & Daniel W. McCollum, 1996. "Which Response Format Reveals the Truth about Donations to a Public Good?," Land Economics, University of Wisconsin Press, vol. 72(2), pages 152-166.
  12. Dubourg, W R & Jones-Lee, M W & Loomes, Graham, 1994. "Imprecise Preferences and the WTP-WTA Disparity," Journal of Risk and Uncertainty, Springer, vol. 9(2), pages 115-33, October.
  13. Wang, Hua, 1997. "Treatment of "Don't-Know" Responses in Contingent Valuation Surveys: A Random Valuation Model," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 219-232, February.
  14. Dubourg, W R & Jones-Lee, M W & Loomes, Graham, 1997. "Imprecise Preferences and Survey Design in Contingent Valuation," Economica, London School of Economics and Political Science, vol. 64(256), pages 681-702, November.
  15. Pearce, David & Crowards, Tom, 1996. "Particulate matter and human health in the United Kingdom," Energy Policy, Elsevier, vol. 24(7), pages 609-619, July.
  16. Rowe, Robert D. & Schulze, William D. & Breffle, William S., 1996. "A Test for Payment Card Biases," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 178-185, September.
  17. Alberini, Anna & Cropper, Maureen & Fu, Tsu-Tan & Krupnick, Alan & Liu, Jin-Tan & Shaw, Daigee & Harrington, Winston, 1997. "Valuing Health Effects of Air Pollution in Developing Countries: The Case of Taiwan," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 107-126, October.
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  20. Loomis, John & Ekstrand, Earl, 1998. "Alternative approaches for incorporating respondent uncertainty when estimating willingness to pay: the case of the Mexican spotted owl," Ecological Economics, Elsevier, vol. 27(1), pages 29-41, October.
  21. Krupnick, Alan J. & Harrington, Winston & Ostro, Bart, 1990. "Ambient ozone and acute health effects: Evidence from daily data," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 1-18, January.
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Cited by:
  1. Cecilia Håkansson, 2008. "A new valuation question: analysis of and insights from interval open-ended data in contingent valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(2), pages 175-188, February.
  2. Li, Hui & Jenkins-Smith, Hank C. & Silva, Carol L. & Berrens, Robert P. & Herron, Kerry G., 2009. "Public support for reducing US reliance on fossil fuels: Investigating household willingness-to-pay for energy research and development," Ecological Economics, Elsevier, vol. 68(3), pages 731-742, January.

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