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Average willingness to pay for disease prevention with personalized health information

Author

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  • David Crainich

    (CNRS-LEM 9221 and IESEG School of Management)

  • Louis Eeckhoudt

    (IESEG School of Management (LEM 9221-CNRS))

Abstract

Personal health related information modifies individuals’ willingness to pay for disease programs inasmuch as it allows health status assessment based on intrinsic (instead of average) characteristics. In this paper, we examine the effect that personalized about the baseline probability of disease has on the average willingness to pay programs reducing either the probability of disease (self-protection) or the severity of disease (self-insurance). We show that such an information rises the average willingness to pay for self-protection while it increases the average willingness to pay for self-insurance if health and wealth are complements (i.e. the marginal utility of wealth rises with health).

Suggested Citation

  • David Crainich & Louis Eeckhoudt, 2016. "Average willingness to pay for disease prevention with personalized health information," Working Papers 2016-EQM-02, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e201602
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    References listed on IDEAS

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    Cited by:

    1. Lu Li & Richard Peter, 2021. "Should we do more when we know less? The effect of technology risk on optimal effort," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(3), pages 695-725, September.
    2. Dickie, Mark & Adamowicz, Wiktor & Gerking, Shelby & Veronesi, Marcella, 2022. "Risk Perception, Learning, and Willingness to Pay to Reduce Heart Disease Risk," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(3), pages 363-382, October.
    3. W. Kip Viscusi, 2019. "Utility functions for mild and severe health risks," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 143-166, June.
    4. Emmanuelle Augeraud-Véron & Marc Leandri, 2023. "Optimal self-protection and health risk perception: bridging the gap between risk theory and the Health Belief Model," EconomiX Working Papers 2023-12, University of Paris Nanterre, EconomiX.
    5. Yves Arrighi & David Crainich & Véronique Flambard & Sophie Massin, 2022. "Personalized information and willingness to pay for non-financial risk prevention: An experiment," Journal of Risk and Uncertainty, Springer, vol. 65(1), pages 57-82, August.
    6. Richard Peter, 2021. "A fresh look at primary prevention for health risks," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1247-1254, May.

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    More about this item

    Keywords

    Personalized health information; disease prevention; willingness to pay;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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