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Evaluating the validity of stated-preference estimates of health values

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  • F. Reed Johnson
  • Matthew F. Bingham

Abstract

Economists have long been faced with the challenge of valuing goods and services that are not traded in markets. A variety of multiple-response stated-preference (SP) methods, which evolved independently in the area of consumer market research, also have been applied to nonmarket-valuation problems such as health-state value measurements. Unfortunately, distortions of the essential supply-demand relationships in such markets make it difficult to verify the validity of SP surveys using market data. However, because SP data include multiple observations for each respondent, it is possible to test a variety of hypotheses about consistency with welfare-theoretic principles and the use of judgment heuristics and learning and fatigue effects. This paper provides some results from two SP surveys eliciting health-state valuations. It focuses on the economic consistency of stated preferences. We show that with a few exceptions, subjects' stated preferences generally agree with welfare-theoretic requirements.

Suggested Citation

  • F. Reed Johnson & Matthew F. Bingham, 2001. "Evaluating the validity of stated-preference estimates of health values," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 137(I), pages 49-63, March.
    • Handle: RePEc:ses:arsjes:2001-i-6
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    References listed on IDEAS

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    1. F. Reed Johnson & Melissa Ruby Banzhaf & William H. Desvousges, 2000. "Willingness to pay for improved respiratory and cardiovascular health: a multiple‐format, stated‐preference approach," Health Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 295-317, June.
    2. Johnson, F. Reed & Desvousges, William H., 1997. "Estimating Stated Preferences with Rated-Pair Data: Environmental, Health, and Employment Effects of Energy Programs," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 79-99, September.
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    6. Stirling Bryan & Martin Buxton & Robert Sheldon & Alison Grant, 1998. "Magnetic resonance imaging for the investigation of knee injuries: an investigation of preferences," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 595-603, November.
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    Cited by:

    1. Gabriela D. Oliveira & Luis C. Dias, 2020. "The potential learning effect of a MCDA approach on consumer preferences for alternative fuel vehicles," Annals of Operations Research, Springer, vol. 293(2), pages 767-787, October.

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