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Monetary valuation of informal care: the well-being valuation method

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Author Info
Bernard van den Berg
Ada Ferrer-i-Carbonell (Faculty of Economics and Business (SCHOLAR), AIAS & Tinbergen Institute, University of Amsterdam, The Netherlands)

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Abstract

This paper estimates the monetary value of providing informal care by means of a well-being valuation method. This is done by assessing the compensating variation necessary to maintain the same level of well-being after an informal caregiver provides an extra hour of informal care. The informal caregiver's well-being is proxied by the answer to two subjective well-being questions that were posed in a questionnaire answered by 865 Dutch informal caregivers between the end of 2001 and the beginning of 2002. In the econometric analysis, a distinction is made between the care recipients who are and the ones who are not a family member of the informal caregiver. The results indicate that an extra hour of informal care is worth about 9 or 10 Euros. This equals 8 or 9 Euros if the care recipient is a family member and about 7 or 9 Euros if not. When applying the contingent valuation method to the same sample, the value obtained was 10.52 Euros per hour. This paper concludes that the well-being valuation method is a useful complement to the more traditional valuation methods in the health economics literature in general and more particularly for the economic valuation of informal care: it includes all costs and effects associated with providing care from the perspective of the informal caregiver, it is relatively cheap to implement, and it offers an additional possibility to determine the convergent validity of the different monetary valuation methods. Copyright © 2007 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1224
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 11 ()
Pages: 1227-1244
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Handle: RePEc:wly:hlthec:v:16:y:2007:i:11:p:1227-1244

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

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Norton, Edward C., 2000. "Long-term care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 17, pages 955-994 Elsevier. [Downloadable!] (restricted)
  2. Bernard van den Berg & Pol Spauwen, 2006. "Measurement of informal care: an empirical study into the valid measurement of time spent on informal caregiving," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-460. [Downloadable!]
  3. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics. [Downloadable!]
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  4. Boyle, Kevin J, et al, 2001. " A Comparison of Conjoint Analysis Response Formats," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(2), pages 441-54, May. [Downloadable!] (restricted)
  5. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July. [Downloadable!] (restricted)
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  6. Johannesson, Magnus & Jonsson, Bengt & Borgquist, Lars, 1991. "Willingness to pay for antihypertensive therapy -- results of a Swedish pilot study," Journal of Health Economics, Elsevier, vol. 10(4), pages 461-473. [Downloadable!] (restricted)
  7. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
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  8. Johannesson, Magnus & Johansson, Per-Olov & Kristrom, Bengt & Gerdtham, Ulf-G., 1993. "Willingness to pay for antihypertensive therapy -- further results," Journal of Health Economics, Elsevier, vol. 12(1), pages 95-108, April. [Downloadable!] (restricted)
  9. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July. [Downloadable!] (restricted)
  10. Philip M. Clarke, 2002. "Testing the convergent validity of the contingent valuation and travel cost methods in valuing the benefits of health care," Health Economics, John Wiley & Sons, Ltd., vol. 11(2), pages 117-127. [Downloadable!]
  11. Ada Ferrer-i-Carbonell & Bernard M.S. van Praag, 2002. "The Subjective Costs of Health Losses due to Chronic Diseases," Tinbergen Institute Discussion Papers 02-023/3, Tinbergen Institute. [Downloadable!]
  12. Bernard van den Berg & Han Bleichrodt & Louis Eeckhoudt, 2005. "The economic value of informal care: a study of informal caregivers' and patients' willingness to pay and willingness to accept for informal care," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 363-376. [Downloadable!]
  13. Roe, Brian & Boyle, Kevin J. & Teisl, Mario F., 1996. "Using Conjoint Analysis to Derive Estimates of Compensating Variation," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 145-159, September. [Downloadable!] (restricted)
  14. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May. [Downloadable!] (restricted)
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  1. Frijters, Paul & Johnston, David W. & Shields, Michael A., 2008. "Happiness Dynamics with Quarterly Life Event Data," IZA Discussion Papers 3604, Institute for the Study of Labor (IZA). [Downloadable!]
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