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

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  • Bernard van den Berg
  • Ada Ferrer-i-Carbonell

    (Faculty of Economics and Business (SCHOLAR), AIAS & Tinbergen Institute, University of Amsterdam, The Netherlands)

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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Bibliographic 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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  1. 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.
  2. 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.
  3. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-31, November.
  4. 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.
  5. 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.
  6. van den Berg, Bernard & Al, Maiwenn & Brouwer, Werner & van Exel, Job & Koopmanschap, Marc, 2005. "Economic valuation of informal care: The conjoint measurement method applied to informal caregiving," Social Science & Medicine, Elsevier, vol. 61(6), pages 1342-1355, September.
  7. 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.
  8. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
  9. 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.
  10. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
  11. 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.
  12. 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.
  13. Bruno S. Frey & Alois Stutzer, 1999. "Measuring Preferences by Subjective Well-Being," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(4), pages 755-778, December.
  14. Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
  15. 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.
  16. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  17. Bernard van denBerg & Werner Brouwer & Job van Exel & Marc Koopmanschap, 2005. "Economic valuation of informal care: the contingent valuation method applied to informal caregiving," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 169-183.
  18. Kevin J. Boyle & Thomas P. Holmes & Mario F. Teisl & Brian Roe, 2001. "A Comparison of Conjoint Analysis Response Formats," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 441-454.
  19. 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.
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