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Testing the convergent validity of the contingent valuation and travel cost methods in valuing the benefits of health care

  • Philip M. Clarke

    (Health Economics Research Centre, Institute of Health Sciences, University of Oxford, Oxford OX3 7LF, UK)

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    In this study, the convergent validity of the contingent valuation method (CVM) and travel cost method (TCM) is tested by comparing estimates of the willingness to pay (WTP) for improving access to mammographic screening in rural areas of Australia. It is based on a telephone survey of 458 women in 19 towns, in which they were asked about their recent screening behaviour and their WTP to have a mobile screening unit visit their nearest town. After eliminating missing data and other non-usable responses the contingent valuation experiment and travel cost model were based on information from 372 and 319 women, respectively. Estimates of the maximum WTP for the use of mobile screening units were derived using both methods and compared. The highest mean WTP estimated using the TCM was $83.10 (95% C.I. $99.06-$68.53), which is significantly less than the estimate of $148.09 ($131.13-$166.60) using the CVM. This could be due to the CVM estimates also reflecting non-use values such as altruism, or a range of potential biases that are known to affect both methods. Further tests of validity are required in order to gain a greater understanding of the relationship between these two methods of estimating WTP. Copyright © 2001 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.651
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    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 11 (2002)
    Issue (Month): 2 ()
    Pages: 117-127

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    Handle: RePEc:wly:hlthec:v:11:y:2002:i:2:p:117-127
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Harvey S. Rosen & Kenneth A. Small, 1979. "Applied Welfare Economics with Discrete Choice Models," NBER Working Papers 0319, National Bureau of Economic Research, Inc.
    2. Nyquist, Hans, 1992. "Optimal Designs of Discrete Response Experiments in Contingent Valuation Studies," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 559-63, August.
    3. Alan Randall, 1994. "Difficulty with the Travel Cost Method," Land Economics, University of Wisconsin Press, vol. 70(1), pages 88-96.
    4. Shogren, Jason F. & Shin, Seung Youll & Hayes, Dermot J. & Kliebenstein, James, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," Staff General Research Papers 701, Iowa State University, Department of Economics.
    5. Culyer, A J, 1971. "The Nature of the Commodity 'Health Care' and Its Efficient Allocation," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 189-211, July.
    6. Richard C. Ready & Jean C. Buzby & Dayuan Hu, 1996. "Differences between Continuous and Discrete Contingent Value Estimates," Land Economics, University of Wisconsin Press, vol. 72(3), pages 397-411.
    7. Schkade David A. & Payne John W., 1994. "How People Respond to Contingent Valuation Questions: A Verbal Protocol Analysis of Willingness to Pay for an Environmental Regulation," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 88-109, January.
    8. Philip Clarke, 2000. "Valuing the benefits of mobile mammographic screening units using the contingent valuation method," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1647-1655.
    9. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326.
    10. Clarke, Philip M., 1998. "Cost-benefit analysis and mammographic screening: a travel cost approach," Journal of Health Economics, Elsevier, vol. 17(6), pages 767-787, December.
    11. Cauley, Stephen Day, 1987. "The Time Price of Medical Care," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 59-66, February.
    12. Carson, Richard T. & Flores, Nicholas E. & Martin, Kerry M. & Wright, Jennifer L., 1995. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148793, Australian Agricultural and Resource Economics Society.
    13. Holmes Thomas P. & Kramer Randall A., 1995. "An Independent Sample Test of Yea-Saying and Starting Point Bias in Dichotomous-Choice Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 121-132, July.
    14. Bengt Kristrom, 1990. "A Non-Parametric Approach to the Estimation of Welfare Measures in Discrete Response Valuation Studies," Land Economics, University of Wisconsin Press, vol. 66(2), pages 135-139.
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