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Econometric treatment of few protest responses in willingness-to-pay studies: An application in health care

Author

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  • Nathalie Havet
  • Magali Morelle
  • Raphaël Remonnay
  • Marie-Odile Carrère

Abstract

In contingent valuation surveys, there is a range of possible explanations for zero bids, from true zero responses consistent with economic decisions to protest responses. According to the empirical literature, which analyzes the determinants of willingness-to-pay (WTP) values from a bidding process, the double-hurdle is the most appropriate econometric approach to account for zero and protest WTP. However, when the number of protest responses is too small to be explicitly modelled, this approach is not applicable. This frequently occurs in critical health care situations, where large samples are not easily available. We discuss the possible econometric strategies for use in such cases. For illustrative purposes, the different models were applied to an empirical situation, which refers to the location preference (i.e. home versus hospital) from French cancer patients for blood transfusion. Our results show that protest responses should not be discarded, even if present in small numbers, and that the type II Tobit and the standard truncated regression model could both be applied. However, since from small finite samples, the most robust estimation is obtained from the bootstrap method with a high number of replications, the truncated regression model, easily applicable, weakly computer time-consuming and not subject to identification problems in this case contrary to the type II Tobit, should be the econometric strategy of choice for various WTP studies in the healthcare field.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Nathalie Havet & Magali Morelle & Raphaël Remonnay & Marie-Odile Carrère, 2012. "Econometric treatment of few protest responses in willingness-to-pay studies: An application in health care," Recherches économiques de Louvain, De Boeck Université, vol. 78(2), pages 53-74.
  • Handle: RePEc:cai:reldbu:rel_782_0053
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    Cited by:

    1. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    2. Raut, Nirmal Kumar & Shrestha, Devendra Prasad, 2011. "Why Low Adult Immunization? An inquiry into the case of Hepatitis B Vaccine in the Peri-Urban Areas of Kathmandu Valley," MPRA Paper 61711, University Library of Munich, Germany, revised Jan 2015.

    More about this item

    Keywords

    protest responses; econometric specifications; contingent valuation; home care;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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