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Deriving welfare measures from stated preference discrete choice modelling experiments, CHERE Discussion Paper No 48

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  • Emily Lancsar

    (University of Newcastle Upon Tyne)

Abstract

The use of Stated Preference Discrete Choice Modelling (SPDCM) is gaining currency in the health economics field as a method of eliciting: preferences for goods and services; the rate at which individuals are prepared to trade off different attributes of a good or service; and the willingness to pay for goods and services. The purpose of this paper is to develop welfare measures from SPDCM data that are consistent with microeconomic welfare theory. The theory of welfare measurement using discrete data and links to the more well known literature using continuous data are presented. The estimation of welfare measures obtained from SPDCM and conjoint analysis experiments reported in the health economics literature to date are discussed, focusing on whether commonly adopted measures are consistent with microeconomic welfare theory. Finally, the Hicksian compensating variation is calculated from discrete data collected from a SPDCM experiment designed to elicit patient preferences for preventive asthma medications.

Suggested Citation

  • Emily Lancsar, 2002. "Deriving welfare measures from stated preference discrete choice modelling experiments, CHERE Discussion Paper No 48," Discussion Papers 48, CHERE, University of Technology, Sydney.
    • Handle: RePEc:her:chedps:48
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    File URL: http://www.chere.uts.edu.au/pdf/dp48.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Emily Lancsar & Elizabeth Savage, 2004. "Deriving welfare measures from discrete choice experiments: a response to Ryan and Santos Silva," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 919-924, September.
    2. Emily Lancsar & Elizabeth Savage, 2004. "Deriving welfare measures from discrete choice experiments: inconsistency between current methods and random utility and welfare theory," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 901-907, September.
    3. Lieke Boonen & Frederik Schut & Bas Donkers & Xander Koolman, 2009. "Which preferred providers are really preferred? Effectiveness of insurers’ channeling incentives on pharmacy choice," International Journal of Health Economics and Management, Springer, vol. 9(4), pages 347-366, December.
    4. Emily Lancsar & Cam Donaldson, 2005. "Discrete choice experiments in health economics: Distinguishing between the method and its application," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(4), pages 314-316, December.
    5. Emily Lancsar & Jordan Louviere, 2008. "Conducting Discrete Choice Experiments to Inform Healthcare Decision Making," PharmacoEconomics, Springer, vol. 26(8), pages 661-677, August.
    6. Lancsar, Emily & Louviere, Jordan & Flynn, Terry, 2007. "Several methods to investigate relative attribute impact in stated preference experiments," Social Science & Medicine, Elsevier, vol. 64(8), pages 1738-1753, April.
    7. J.M.C. Santos Silva, 2004. "Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (2)," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 913-918, September.

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    More about this item

    Keywords

    Discrete Choice Modelling; conjoint analysis;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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