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The effect of protest zeros on estimates of willingness to pay in healthcare contingent valuation analysis

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  • William Fonta
  • H. Ichoku
  • Jane Kabubo-Mariara

Abstract

’Protest zeros’ occur when respondents reject some aspect of the contingent valuation (CV) market scenario by reporting a zero value even though they place a positive value on the amenity being valued. This is inevitable even in the best-designed CV study, and, when excluded on an ad hoc basis, may cause a selection bias problem. This could affect the reliability of the willingness to pay (WTP) estimates obtained for preference assessment. Treatment of ‘protest zeros’ in general, and particularly in the context of developing countries, has been rather unsatisfactory. Most case studies employ the Heckman 2-step approach, which is much less robust to co-linearity problems than the Full Information Maximum Likelihood (FIML) estimator. The main objective of this article is to illustrate a sequential procedure to simultaneously deal with co-linearity and selectivity bias resulting from excluding ‘protest zeros’ in CV analysis. The sequential procedure involves different levels of estimation and diagnostics with the 2-step and FIML estimators; the duration of the procedure depends on the diagnostic test results at each stage of the estimations. The data used for the analysis were elicited using the conventional dichotomous choice buttressed with an open-ended follow-up question. The survey was designed to elicit households’ WTP for a proposed community-based malaria control scheme in rural Cameroon. In the application context, we found that the different levels of estimation and diagnostics resulted in reliable WTP estimates from the FIML approach, which would obviously have been overlooked in the absence of such diagnostics. Copyright Adis Data Information BV 2010

Suggested Citation

  • William Fonta & H. Ichoku & Jane Kabubo-Mariara, 2010. "The effect of protest zeros on estimates of willingness to pay in healthcare contingent valuation analysis," Applied Health Economics and Health Policy, Springer, vol. 8(4), pages 225-237, July.
  • Handle: RePEc:spr:aphecp:v:8:y:2010:i:4:p:225-237
    DOI: 10.2165/11530400-000000000-00000
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    2. Lava Prakash Yadav & Stephen O’Neill & Tom van Rensburg, 2013. "Economic Crisis and the Restructuring of Wage Setting Mechanisms for Vulnerable Workers in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 44(2), pages 221-245.
    3. Eve Wittenberg & Lisa Prosser, 2011. "Ordering errors, objections and invariance in utility survey responses," Applied Health Economics and Health Policy, Springer, vol. 9(4), pages 225-241, July.
    4. Eunjung Cho & Youngsang Cho, 2021. "Estimating the economic value of ultrafine particles information: A contingent valuation method," Papers 2107.03034, arXiv.org.
    5. Brouwer, Roy & Martín-Ortega, Julia, 2012. "Modeling self-censoring of polluter pays protest votes in stated preference research to support resource damage estimations in environmental liability," Resource and Energy Economics, Elsevier, vol. 34(1), pages 151-166.
    6. Hynes, Stephen & O'Donoghue, Cathal, 2019. "Estimating the value of achieving good ecological status across Irish water catchments using value transfer," Working Papers 309538, National University of Ireland, Galway, Socio-Economic Marine Research Unit.
    7. Miguel Ángel Tobarra-González, 2015. "A new recoding method for treating protest responses in contingent valuation studies using travel cost data," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 58(8), pages 1479-1489, August.
    8. Haddak, Mohamed Mouloud & Lefèvre, Marie & Havet, Nathalie, 2016. "Willingness-to-pay for road safety improvement," Transportation Research Part A: Policy and Practice, Elsevier, vol. 87(C), pages 1-10.
    9. Bayart, Caroline & Bonnel, Patrick & Havet, Nathalie, 2018. "Daily (im)mobility behaviours in France: An application of hurdle models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 456-467.
    10. Pedersen, Line Bjørnskov & Gyrd-Hansen, Dorte & Kjær, Trine, 2011. "The influence of information and private versus public provision on preferences for screening for prostate cancer: A willingness-to-pay study," Health Policy, Elsevier, vol. 101(3), pages 277-289, August.
    11. Nathalie Havet & Magali Morelle & Raphaël Remonnay & Marie-Odile Carrere, 2012. "Cancer patients’ willingness to pay for blood transfusions at home: results from a contingent valuation study in a French cancer network," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(3), pages 289-300, June.
    12. Afentoula G. Mavrodi & Vassilis H. Aletras, 2019. "Preliminary Results of a Healthcare Contingent Valuation Study in Greece," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 9(3-4), pages 3-16.
    13. M. Trapero‐Bertran & H. Mistry & J. Shen & J. Fox‐Rushby, 2013. "A Systematic Review And Meta‐Analysis Of Willingness‐To‐Pay Values: The Case Of Malaria Control Interventions," Health Economics, John Wiley & Sons, Ltd., vol. 22(4), pages 428-450, April.
    14. Massarutto, Antonio & Roder, G. & Troiano, S., 2022. "Better safe than sorry? Stated preferences and the precautionary principle for securing drinking water quality in an Italian district," Utilities Policy, Elsevier, vol. 76(C).

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