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Threats to the estimation of benefit: are preference elicitation methods accurate?

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  • Andrew J Lloyd

    (MEDTAP International Inc., London, UK)

Abstract

Stated preference methods are used to estimate the value that people place on health care. The data that emerges from these studies is used to guide health policy. However, relatively little is known about how individuals make decisions in a preference elicitation task. Two methods (willingness to pay and conjoint analysis) are considered within the context of the literature from psychology (and also environmental economics) regarding how people construct preferences, process information, and make decisions. There is substantial evidence that individuals employ heuristics (cognitive shortcuts) in order to simplify tasks they are presented with. The use of heuristics implies that people ignore much of the information they are presented with and make decisions which would not be considered rational in the economic sense. These stated preference methods assume that individuals trade between the different attributes of a good or service when making decisions - an assumption that other theories predict is wrong. The implications of this are discussed. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Andrew J Lloyd, 2003. "Threats to the estimation of benefit: are preference elicitation methods accurate?," Health Economics, John Wiley & Sons, Ltd., vol. 12(5), pages 393-402.
  • Handle: RePEc:wly:hlthec:v:12:y:2003:i:5:p:393-402 DOI: 10.1002/hec.772
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    Cited by:

    1. Morkbak, Morten Raun & Jensen, Jorgen Dejgaard, 2012. "Do consumers’ preferences change when on vacation? A willingness to pay study on apples and honey," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123525, Agricultural and Applied Economics Association.
    2. Dorte Gyrd-Hansen & Ivar Sønbø Kristiansen, 2008. "Preferences for 'life-saving' programmes: Small for all or gambling for the prize?," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 709-720.
    3. Determann, Domino & Lambooij, Mattijs S. & de Bekker-Grob, Esther W. & Hayen, Arthur P. & Varkevisser, Marco & Schut, Frederik T. & Wit, G. Ardine de, 2016. "What health plans do people prefer? The trade-off between premium and provider choice," Social Science & Medicine, Elsevier, vol. 165(C), pages 10-18.
    4. Colin Green & Karen Gerard, 2009. "Exploring the social value of health-care interventions: a stated preference discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 951-976.
    5. Stevens, Katherine & McCabe, Christopher & Brazier, John & Roberts, Jennifer, 2007. "Multi-attribute utility function or statistical inference models: A comparison of health state valuation models using the HUI2 health state classification system," Journal of Health Economics, Elsevier, vol. 26(5), pages 992-1002, September.
    6. Richard D. Smith, 2007. "The role of 'reference goods' in contingent valuation: should we help respondents to 'construct' their willingness to pay?," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1319-1332.
    7. Ratcliffe, Julie & Huynh, Elisabeth & Chen, Gang & Stevens, Katherine & Swait, Joffre & Brazier, John & Sawyer, Michael & Roberts, Rachel & Flynn, Terry, 2016. "Valuing the Child Health Utility 9D: Using profile case best worst scaling methods to develop a new adolescent specific scoring algorithm," Social Science & Medicine, Elsevier, vol. 157(C), pages 48-59.
    8. Regier, Dean A. & Watson, Verity & Burnett, Heather & Ungar, Wendy J., 2014. "Task complexity and response certainty in discrete choice experiments: An application to drug treatments for juvenile idiopathic arthritis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 50(C), pages 40-49.
    9. Knox, Stephanie A. & Viney, Rosalie C. & Gu, Yuanyuan & Hole, Arne R. & Fiebig, Denzil G. & Street, Deborah J. & Haas, Marion R. & Weisberg, Edith & Bateson, Deborah, 2013. "The effect of adverse information and positive promotion on women's preferences for prescribed contraceptive products," Social Science & Medicine, Elsevier, vol. 83(C), pages 70-80.
    10. Katherine Stevens, 2012. "Valuation of the Child Health Utility 9D Index," PharmacoEconomics, Springer, vol. 30(8), pages 729-747, August.
    11. Olsen, Jan Abel & Donaldson, Cam & Shackley, Phil, 2005. "Implicit versus explicit ranking: On inferring ordinal preferences for health care programmes based on differences in willingness-to-pay," Journal of Health Economics, Elsevier, vol. 24(5), pages 990-996, September.
    12. 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.
    13. Hickson, Allister & Phillips, Al & Morales, Gene, 2007. "Public perception related to a hydrogen hybrid internal combustion engine transit bus demonstration and hydrogen fuel," Energy Policy, Elsevier, vol. 35(4), pages 2249-2255, April.
    14. Karimi, M. & Brazier, J. & Paisley, S., 2017. "How do individuals value health states? A qualitative investigation," Social Science & Medicine, Elsevier, vol. 172(C), pages 80-88.
    15. McCabe, Christopher & Brazier, John & Gilks, Peter & Tsuchiya, Aki & Roberts, Jennifer & O'Hagan, Anthony & Stevens, Katherine, 2006. "Using rank data to estimate health state utility models," Journal of Health Economics, Elsevier, vol. 25(3), pages 418-431, May.
    16. Weng, Weizhe & Morrison, Mark & Boyle, Kevin & Boxall, Peter, 2017. "The effect of the number of alternatives in a choice experiment with an application to the Macquarie Marshes, AU," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252836, Southern Agricultural Economics Association.
    17. David Whynes & Emma Frew & Jane Wolstenholme, 2005. "Willingness-to-Pay and Demand Curves: A Comparison of Results Obtained Using Different Elicitation Formats," International Journal of Health Economics and Management, Springer, vol. 5(4), pages 369-386, December.
    18. repec:spr:aphecp:v:15:y:2017:i:6:d:10.1007_s40258-017-0344-8 is not listed on IDEAS
    19. repec:eee:eejocm:v:25:y:2017:i:c:p:3-10 is not listed on IDEAS
    20. Emily Lancsar & Peter Burge, 2014. "Choice modelling research in health economics," Chapters,in: Handbook of Choice Modelling, chapter 28, pages 675-687 Edward Elgar Publishing.
    21. Angela Robinson & Judith Covey & Anne Spencer & Graham Loomes, 2007. "Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment," Working Papers 597, Queen Mary University of London, School of Economics and Finance.

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