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Testing the assumptions of rationality, continuity and symmetry when applying discrete choice experiments in health care

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  • Mandy Ryan
  • Angela Bate

Abstract

In the absence of revealed preference behaviour, economists use experimental techniques to estimate welfare changes. Such an approach relies on a number of assumptions concerning individual behaviour. This paper uses a discrete choice experiment to test three of these assumptions - rationality, continuity and symmetry. The experiment was carried out with users of a rheumatology clinic in the Grampian area of Scotland and was concerned with preferences for a specialist-nurse-led clinic. Two tests of 'rationality' were included in the experiment. Tests were carried out to see if respondents always chose on the basis of their preferred staffing, suggesting discontinuities in the utility function. The axiom of symmetry was tested using a split sample design, with respondents divided into two groups. Each group received a different questionnaire that varied with respect to the order of the choices. Over 30% of respondents provided at least one 'irrational' response. Such respondents did not differ significantly in their characteristics from 'rational' responses, suggesting that utility estimates would not be biased if this group were excluded from the analysis. Seventeen per cent of respondents showed signs of having non-compensatory utility functions. Evidence was found to support the axiom of symmetry. Future work should explore the axioms of rationality and continuity in more detail.

Suggested Citation

  • Mandy Ryan & Angela Bate, 2001. "Testing the assumptions of rationality, continuity and symmetry when applying discrete choice experiments in health care," Applied Economics Letters, Taylor & Francis Journals, vol. 8(1), pages 59-63.
  • Handle: RePEc:taf:apeclt:v:8:y:2001:i:1:p:59-63
    DOI: 10.1080/135048501750041312
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    Citations

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    Cited by:

    1. Jens Hougaard & Tue Tjur & Lars Østerdal, 2012. "On the meaningfulness of testing preference axioms in stated preference discrete choice experiments," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(4), pages 409-417, August.
    2. Danny Campbell & W. George Hutchinson & Riccardo Scarpa, 2006. "Lexicographic Preferences in Discrete Choice Experiments: Consequences on Individual-Specific Willingness to Pay Estimates," Working Papers 2006.128, Fondazione Eni Enrico Mattei.
    3. Rulleau, Bénédicte & Dachary-Bernard, Jeanne, 2012. "Preferences, rational choices and economic valuation: Some empirical tests," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 198-206.
    4. Soliño, Mario & Farizo, Begoña A. & Vázquez, María X. & Prada, Albino, 2012. "Generating electricity with forest biomass: Consistency and payment timeframe effects in choice experiments," Energy Policy, Elsevier, vol. 41(C), pages 798-806.
    5. Álvarez, Begoña & Rodríguez-Míguez, Eva, 2011. "Patients' self-interested preferences: Empirical evidence from a priority setting experiment," Social Science & Medicine, Elsevier, vol. 72(8), pages 1317-1324, April.
    6. Karolin Becker & Peter Zweifel, 2008. "Age and Choice in Health Insurance," The Patient: Patient-Centered Outcomes Research, Springer;Johns Hopkins Bloomberg School of Public Health, vol. 1(1), pages 27-40, January.
    7. Begoña Álvarez & Eva Rodríguez-Míguez, 2009. "Patients’ self-interest bias: Empirical evidence from a priority-setting experiment," Working Papers 0903, Universidade de Vigo, Departamento de Economía Aplicada.
    8. Schwappach, David L.B. & Strasmann, Thomas J., 2006. ""Quick and dirty numbers"?: The reliability of a stated-preference technique for the measurement of preferences for resource allocation," Journal of Health Economics, Elsevier, vol. 25(3), pages 432-448, May.
    9. Paul Scuffham & Jennifer Whitty & Matthew Taylor & Ruth Saxby, 2010. "Health system choice," Applied Health Economics and Health Policy, Springer, vol. 8(2), pages 89-97, March.
    10. Neuman, Tzahi & Neuman, Einat & Neuman, Shoshana, 2010. "Explorations of the effect of experience on preferences for a health-care service," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(3), pages 407-419, June.
    11. Emily Lancsar & Jordan Louviere, 2008. "Conducting Discrete Choice Experiments to Inform Healthcare Decision Making," PharmacoEconomics, Springer, vol. 26(8), pages 661-677, August.
    12. Harry Telser & Karolin Becker & Peter Zweifel, 2008. "Validity and Reliability of Willingness-to-Pay Estimates," The Patient: Patient-Centered Outcomes Research, Springer;Johns Hopkins Bloomberg School of Public Health, vol. 1(4), pages 283-298, October.
    13. Alessandro Mengoni & Chiara Seghieri & Sabina Nuti, 2013. "The application of discrete choice experiments in health economics: a systematic review of the literature," Working Papers 201301, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
    14. Araña, Jorge E. & León, Carmelo J. & Quevedo, Jose L., 2006. "The effect of medical experience on the economic evaluation of health policies. A discrete choice experiment," Social Science & Medicine, Elsevier, vol. 63(2), pages 512-524, July.
    15. Mandy Ryan & Verity Watson & Vikki Entwistle, 2009. "Rationalising the 'irrational': a think aloud study of discrete choice experiment responses," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 321-336.
    16. Pepermans, Guido, 2014. "Valuing smart meters," Energy Economics, Elsevier, vol. 45(C), pages 280-294.

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