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A note on the relationship between ex ante and expected willingness to pay for health care

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  • Johannesson, Magnus

Abstract

It has been argued that the willingness to pay for health care services in contingent valuation studies should be assessed ex ante from an insurance perspective. It may however be easier to assess the willingness to pay among a group of patients in need of a specific treatment. This willingness to pay measure can be used to estimate the expected willingness to pay. This paper investigates the relationship between ex ante and expected willingness to pay. It is shown that expected willingness to pay is a lower bound for ex ante willingness to pay for a treatment that restores the individual to full health for an individual that is risk averse with respect to income. For a treatment that does not restore an individual to full health the expected willingness to pay is not necessarily a lower bound for the ex ante willingness to pay if the marginal utility of income increases with better health.

Suggested Citation

  • Johannesson, Magnus, 1996. "A note on the relationship between ex ante and expected willingness to pay for health care," Social Science & Medicine, Elsevier, vol. 42(3), pages 305-311, February.
  • Handle: RePEc:eee:socmed:v:42:y:1996:i:3:p:305-311
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    Cited by:

    1. Omar Galárraga & Sandra Sosa-Rubí & César Infante & Paul Gertler & Stefano Bertozzi, 2014. "Willingness-to-accept reductions in HIV risks: conditional economic incentives in Mexico," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(1), pages 41-55, January.
    2. John E. Ataguba & Hyacinth E. Ichoku & William M. Fonta, 2008. "Estimating the willingness to pay for community healthcare insurance in rural Nigeria," Working Papers PMMA 2008-10, PEP-PMMA.
    3. Thomas Hammerschmidt & Hans-Peter Zeitler & Reiner Leidl, 2004. "A utility-theoretic approach to the aggregation of willingness to pay measured in decomposed scenarios: development and empirical test," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 345-361.
    4. Thomas Klose, 2003. "A utility-theoretic model for QALYs and willingness to pay," Health Economics, John Wiley & Sons, Ltd., vol. 12(1), pages 17-31.
    5. Jose-Luis Pinto-Prades & Veronica Farreras & Jaime de Bobadilla, 2008. "Willingness to pay for a reduction in mortality risk after a myocardial infarction: an application of the contingent valuation method to the case of eplerenone," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 9(1), pages 69-78, February.
    6. Braun, Alexander & Schmeiser, Hato & Schreiber, Florian, 2016. "On consumer preferences and the willingness to pay for term life insurance," European Journal of Operational Research, Elsevier, vol. 253(3), pages 761-776.
    7. David M. Cutler & Elizabeth Richardson, 1999. "Your Money and Your Life: The Value of Health and What Affects It," NBER Chapters,in: Frontiers in Health Policy Research, volume 2, pages 99-132 National Bureau of Economic Research, Inc.
    8. Greenberg, Dan & Bakhai, Ameet & Neumann, Peter J. & Cohen, David J., 2004. "Willingness to pay for avoiding coronary restenosis and repeat revascularization: results from a contingent valuation study," Health Policy, Elsevier, vol. 70(2), pages 207-216, November.
    9. Joan Costa Font & Juan Rovira Forns, 2004. "Willigness to Pay for Long-Term Care Coverage: the Role of Private Information and Self-Insurance," Working Papers in Economics 124, Universitat de Barcelona. Espai de Recerca en Economia.
    10. Liljas, Bengt, 1998. "The demand for health with uncertainty and insurance," Journal of Health Economics, Elsevier, vol. 17(2), pages 153-170, April.
    11. Geneau, Robert & Massae, Patrick & Courtright, Paul & Lewallen, Susan, 2008. "Using qualitative methods to understand the determinants of patients' willingness to pay for cataract surgery: A study in Tanzania," Social Science & Medicine, Elsevier, vol. 66(3), pages 558-568, February.

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