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Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (1)

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  • Mandy Ryan

Abstract

Lancsar and Savage argue that current methods of deriving welfare estimates, using discrete choice experiments, are inconsistent with random utility and welfare theory. In this paper I show that this not the case. The general formula proposed by Small and Rosen for estimating welfare, which Lancsar and Savage claim should be used, reduces to the method used by health economists for state of the world models. The important question then becomes when are state of the world models, as opposed to multiple alternative models, appropriate? Copyright © 2004 John Wiley & Sons, Ltd.

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  • Mandy Ryan, 2004. "Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (1)," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 909-912, September.
    • Handle: RePEc:wly:hlthec:v:13:y:2004:i:9:p:909-912
    DOI: 10.1002/hec.869
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    1. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    2. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304.
    3. Adamowicz W. & Louviere J. & Williams M., 1994. "Combining Revealed and Stated Preference Methods for Valuing Environmental Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 26(3), pages 271-292, May.
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    1. Clark, Michael & Moro, Domenico & Szczepura, Ala, 2009. "Balancing patient preferences and clinical needs: Community versus hospital based care for patients with suspected DVT," Health Policy, Elsevier, vol. 90(2-3), pages 313-319, May.
    2. Chandoevwit, Worawan & Wasi, Nada, 2020. "Incorporating discrete choice experiments into policy decisions: Case of designing public long-term care insurance," Social Science & Medicine, Elsevier, vol. 258(C).
    3. Rinaldo Brau & Matteo Lippi Bruni, 2008. "Eliciting the demand for long‐term care coverage: a discrete choice modelling analysis," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 411-433, March.
    4. Fawsitt, Christopher G. & Bourke, Jane & Greene, Richard A. & McElroy, Brendan & Krucien, Nicolas & Murphy, Rosemary & Lutomski, Jennifer E., 2017. "What do women want? Valuing women’s preferences and estimating demand for alternative models of maternity care using a discrete choice experiment," Health Policy, Elsevier, vol. 121(11), pages 1154-1160.
    5. Carol Mansfield & Daniel J. Phaneuf & F. Reed Johnson & Jui-Chen Yang & Robert Beach, 2008. "Preferences for Public Lands Management under Competing Uses: The Case of Yellowstone National Park," Land Economics, University of Wisconsin Press, vol. 84(2), pages 282-305.
    6. Lena Winslott Hiselius, 2005. "Using Choice Experiments to Assess People's Preferences for Railway Transports of Hazardous Materials," Risk Analysis, John Wiley & Sons, vol. 25(5), pages 1199-1214, October.
    7. Mandy Ryan & Karen Gerard & Gillian Currie, 2012. "Using Discrete Choice Experiments in Health Economics," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 41, Edward Elgar Publishing.
    8. F. Reed Johnson & Ateesha F. Mohamed & Semra Özdemir & Deborah A. Marshall & Kathryn A. Phillips, 2011. "How does cost matter in health‐care discrete‐choice experiments?," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 323-330, March.
    9. Richard Norman & Jane Hall & Deborah Street & Rosalie Viney, 2013. "Efficiency And Equity: A Stated Preference Approach," Health Economics, John Wiley & Sons, Ltd., vol. 22(5), pages 568-581, May.
    10. Heagney, E.C. & Rose, J.M. & Ardeshiri, A. & Kovac, M., 2019. "The economic value of tourism and recreation across a large protected area network," Land Use Policy, Elsevier, vol. 88(C).
    11. Arne Risa Hole, 2007. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 827-840, August.
    12. Deborah A. Marshall & F. Reed Johnson & Nathalie A. Kulin & Semra Özdemir & Judith M. E. Walsh & John K. Marshall & Stephanie Van Bebber & Kathryn A. Phillips, 2009. "How do physician assessments of patient preferences for colorectal cancer screening tests differ from actual preferences? A comparison in Canada and the United States using a stated‐choice survey," Health Economics, John Wiley & Sons, Ltd., vol. 18(12), pages 1420-1439, December.
    13. Emma McIntosh, 2006. "Using Discrete Choice Experiments within a Cost-Benefit Analysis Framework," PharmacoEconomics, Springer, vol. 24(9), pages 855-868, September.
    14. Ebenezer Kwabena Tetteh & Steve Morris & Nigel Titcheneker-Hooker, 2017. "Discrete-choice modelling of patient preferences for modes of drug administration," Health Economics Review, Springer, vol. 7(1), pages 1-14, December.
    15. Esther W. de Bekker‐Grob & Mandy Ryan & Karen Gerard, 2012. "Discrete choice experiments in health economics: a review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 145-172, February.
    16. Vásquez Lavin, Felipe & Barrientos, Manuel & Castillo, Álvaro & Herrera, Iván & Ponce Oliva, Roberto D., 2020. "Firewood certification programs: Key attributes and policy implications," Energy Policy, Elsevier, vol. 137(C).
    17. Moisés Carrasco Garcés & Felipe Vasquez-Lavin & Roberto D. Ponce Oliva & José Luis Bustamante Oporto & Manuel Barrientos & Arcadio A. Cerda, 2021. "Embedding effect and the consequences of advanced disclosure: evidence from the valuation of cultural goods," Empirical Economics, Springer, vol. 61(2), pages 1039-1062, August.

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