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Demand assessment and price-elasticity estimation of quality-improved primary health care in palestine: a contribution from the contingent valuation method

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Author Info
Awad Mataria
Stéphane Luchini (Research Group in Quantitative Economics of Aix-Marseille (GREQAM-CNRS), and Institute of Public Economics (IDEP), Marseille, France)
Yousef Daoud (Department of Economics, Faculty of Commerce and Economics, Birzeit University, Birzeit, Palestine)
Jean-Paul Moatti

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Abstract

This paper proposes a new methodology to assess demand and price-elasticity for health care, based on patients' stated willingness to pay (WTP) values for certain aspects of health care quality improvements. A conceptual analysis of how respondents consider contingent valuation (CV) questions allowed us to specify a probability density function of stated WTP values, and consequently, to model a demand function for quality-improved health care, using a parametric survival approach. The model was empirically estimated using a CV study intended to assess patients' values for improving the quality of primary health care (PHC) services in Palestine. A random sample of 499 individuals was interviewed following medical consultation in four PHC centers. Quality was assessed using a multi-attribute approach; and respondents valued seven specific quality improvements using a decomposed valuation scenario and a payment card elicitation technique. Our results suggest an inelastic demand at low user fees levels, and when the price-increase is accompanied with substantial quality-improvements. Nevertheless, demand becomes more and more elastic if user fees continue to rise. On the other hand, patients' reactions to price-increase turn out to depend on their level of income. Our results can be used to design successful health care financing strategies that include a consideration of patients' preferences and financial capacities. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1216
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 10 ()
Pages: 1051-1068
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Handle: RePEc:wly:hlthec:v:16:y:2007:i:10:p:1051-1068

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

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  1. Foreit, James R. & Foreit, Karen G. Fleischman, 2003. "The reliability and validity of willingness to pay surveys for reproductive health pricing decisions in developing countries," Health Policy, Elsevier, vol. 63(1), pages 37-47, January. [Downloadable!] (restricted)
  2. Ryan, Mandy & Scott, David A. & Donaldson, Cam, 2004. "Valuing health care using willingness to pay: a comparison of the payment card and dichotomous choice methods," Journal of Health Economics, Elsevier, vol. 23(2), pages 237-258, March. [Downloadable!] (restricted)
  3. Mataria, Awad & Donaldson, Cam & Luchini, Stephane & Moatti, Jean-Paul, 2004. "A stated preference approach to assessing health care-quality improvements in Palestine: from theoretical validity to policy implications," Journal of Health Economics, Elsevier, vol. 23(6), pages 1285-1311, November. [Downloadable!] (restricted)
  4. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-66, March.
  5. Johannesson, Magnus & Jonsson, Bengt, 1991. "Economic evaluation in health care: Is there a role for cost-benefit analysis?," Health Policy, Elsevier, vol. 17(1), pages 1-23, February. [Downloadable!] (restricted)
  6. Stewart, Jennifer M. & O'Shea, Eamon & Donaldson, Cam & Shackley, Phil, 2002. "Do ordering effects matter in willingness-to-pay studies of health care?," Journal of Health Economics, Elsevier, vol. 21(4), pages 585-599, July. [Downloadable!] (restricted)
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  7. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May. [Downloadable!] (restricted)
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