Advanced Search
MyIDEAS: Login

Willingness to Pay for Drug Rehabilitation: Implications for Cost Recovery

Contents:

Author Info

  • David Bishai
  • Jody Sindelar

Abstract

Objectives: This study estimates the value that clients place on drug rehabilitation services at the time of intake and how this value varies with the probability of success and availability of social services. Methods: We interviewed 241 heroin users who had been referred to, but had not yet entered, methadone maintenance treatment in Baltimore, Maryland. We asked each subject to state a preference among three hypothetical treatment programs that varied across 3 domains: weekly fee paid by the client out of pocket ($5 to $100), presence/absence of case management, and time spent heroin-free (3 to 24 months). Each subject was asked to complete 18 orthogonal comparisons. Subsequently each subject was asked if they likely would enroll in their preferred choice among the set of three. We computed the expected willingness to pay (WTP) as the probability of enrollment times the fee considered in each choice considered from a multivariate logistic model that controlled for product attributes. We also estimated the price elasticity of demand. Results: We found that 21% of clients preferred programs that were logically dominated by other options. The median expected fee subjects were willing to pay for a program that offered 3 months of heroin-free time was $7.30 per week, rising to $17.11 per week for programs that offered 24 months of heroin-free time. The availability of case management increased median WTP by $5.64 per week. The fee was the most important predictor of the self-reported probability of enrollment with a price elasticity of -0.39 (SE 0.042). Conclusions: Clients' median willingness to pay for drug rehabilitation fell short of the average program costs of $82 per week, which reinforces the need for continued subsidization as drug treatment has high positive externalities. Clients will pay more for higher rates of treatment success and for the presence of case management.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w12506.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12506.

as in new window
Length:
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:nbr:nberwo:12506

Note: HE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June.
  2. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, issue Jun.
  3. Mireia Jofre-Bonet & Jody L. Sindelar, 2002. "Drug Treatment as a Crime Fighting Tool," NBER Working Papers 9038, National Bureau of Economic Research, Inc.
  4. Dockner, Engelbert J & Feichtinger, Gustav, 1993. "Cyclical Consumption Patterns and Rational Addiction," American Economic Review, American Economic Association, vol. 83(1), pages 256-63, March.
  5. Richard H. Thaler & Cass R. Sunstein, 2003. "Libertarian Paternalism," American Economic Review, American Economic Association, vol. 93(2), pages 175-179, May.
  6. Haas-Wilson, Deborah & Scheffler, Richard & Cheadle, A, 1989. "Demand for Mental Health Services: An Episode of Treatment Approach," MPRA Paper 19862, University Library of Munich, Germany.
  7. Richard J. Zeckhauser & Donald S. Shepard, 1982. "The Choice of Health Policies with Heterogeneous Populations," NBER Working Papers 0612, National Bureau of Economic Research, Inc.
  8. Cartwright, William S. & Solano, Paul L., 2003. "The economics of public health: financing drug abuse treatment services," Health Policy, Elsevier, vol. 66(3), pages 247-260, December.
  9. Sophia Rabe-Hesketh & Anders Skrondal & Andrew Pickles, 2002. "Reliable estimation of generalized linear mixed models using adaptive quadrature," Stata Journal, StataCorp LP, vol. 2(1), pages 1-21, February.
  10. Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-83, June.
  11. Natalia N. Borisova & Allen C. Goodman, 2003. "Measuring the value of time for methadone maintenance clients: willingness to pay, willingness to accept, and the wage rate," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 323-334.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. NicolasR. Ziebarth, 2010. "Estimating Price Elasticities of Convalescent Care Programmes," Economic Journal, Royal Economic Society, vol. 120(545), pages 816-844, 06.
  2. Nathalie Havet & Magali Morelle & Alexis Penot & Raphaël Remonnay, 2012. "The information content of the WTP-WTA gap : An empirical analysis among severely ill patients," Working Papers halshs-00697762, HAL.
  3. Nicolas R. Ziebarth, 2009. ""Do I Really Need to Go to Rehab? I'd Say No, No, No.": Estimating Price Elasticities of Convalescent Care Programs," Discussion Papers of DIW Berlin 910, DIW Berlin, German Institute for Economic Research.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12506

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.