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Evidence of range bias in contingent valuation payment scales

  • David K. Whynes

    (School of Economics, University of Nottingham, UK)

  • Jane L. Wolstenholme

    (Health Economics Research Centre, University of Oxford, UK)

  • Emma Frew

    (Health Economics Facility, University of Birmingham, UK)

Registered author(s):

    The payment scale format has been widely used in willingness-to-pay studies in health care. Concerns have been expressed that the format is, in theory, prone to range bias, although this proposition has not been tested directly. We report the findings of a contingent valuation questionnaire study of colorectal cancer screening, wherein different subjects were provided with payment scales of two different lengths. Whilst the long-scale instrument included scale values up to £1000, the short-scale version extended only to £100. After controlling for inter-sample differences in, for example, income, education and health behaviour, it emerged that the long-scale instrument produced a mean willingness to pay more than 30% higher than that resulting from the short-scale version. We believe our findings to be strongly supportive of the likelihood of range bias in payment-scale instruments, with important consequences for the estimation of both average valuation and consumer surplus. Copyright © 2003 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.809
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    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 13 (2004)
    Issue (Month): 2 ()
    Pages: 183-190

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    Handle: RePEc:wly:hlthec:v:13:y:2004:i:2:p:183-190
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. 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.
    2. Cameron, Trudy Ann, 1987. "The impact of grouping coarseness in alternative grouped-data regression models," Journal of Econometrics, Elsevier, vol. 35(1), pages 37-57, May.
    3. Jorgensen, Bradley S. & Syme, Geoffrey J., 2000. "Protest responses and willingness to pay: attitude toward paying for stormwater pollution abatement," Ecological Economics, Elsevier, vol. 33(2), pages 251-265, May.
    4. Spash, Clive L., 2000. "Ecosystems, contingent valuation and ethics: the case of wetland re-creation," Ecological Economics, Elsevier, vol. 34(2), pages 195-215, August.
    5. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
    6. Neilson, Aileen R. & Whynes, David K., 1995. "Determinants of persistent compliance with screening for colorectal cancer," Social Science & Medicine, Elsevier, vol. 41(3), pages 365-374, August.
    7. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
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