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Demand assessment and price-elasticity estimation of quality-improved primary health care in palestine: a contribution from the contingent valuation method

Author

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  • Awad Mataria
  • Stéphane Luchini

    (Research Group in Quantitative Economics of Aix-Marseille (GREQAM-CNRS), and Institute of Public Economics (IDEP), Marseille, France)

  • Yousef Daoud

    (Department of Economics, Faculty of Commerce and Economics, Birzeit University, Birzeit, Palestine)

  • Jean-Paul Moatti

Abstract

This paper proposes a new methodology to assess demand and price-elasticity for health care, based on patients' stated willingness to pay (WTP) values for certain aspects of health care quality improvements. A conceptual analysis of how respondents consider contingent valuation (CV) questions allowed us to specify a probability density function of stated WTP values, and consequently, to model a demand function for quality-improved health care, using a parametric survival approach. The model was empirically estimated using a CV study intended to assess patients' values for improving the quality of primary health care (PHC) services in Palestine. A random sample of 499 individuals was interviewed following medical consultation in four PHC centers. Quality was assessed using a multi-attribute approach; and respondents valued seven specific quality improvements using a decomposed valuation scenario and a payment card elicitation technique. Our results suggest an inelastic demand at low user fees levels, and when the price-increase is accompanied with substantial quality-improvements. Nevertheless, demand becomes more and more elastic if user fees continue to rise. On the other hand, patients' reactions to price-increase turn out to depend on their level of income. Our results can be used to design successful health care financing strategies that include a consideration of patients' preferences and financial capacities. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Awad Mataria & Stéphane Luchini & Yousef Daoud & Jean-Paul Moatti, 2007. "Demand assessment and price-elasticity estimation of quality-improved primary health care in palestine: a contribution from the contingent valuation method," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1051-1068.
    • Handle: RePEc:wly:hlthec:v:16:y:2007:i:10:p:1051-1068
    DOI: 10.1002/hec.1216
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    Cited by:

    1. Andriy Danyliv & Milena Pavlova & Irena Gryga & Wim Groot, 2015. "Preferences for physician services in Ukraine: a discrete choice experiment," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(4), pages 346-365, October.
    2. Chakravarty, Amiya K. & Werner, Adrian S., 2011. "Telecom service provider portal: Revenue sharing and outsourcing," European Journal of Operational Research, Elsevier, vol. 215(1), pages 289-300, November.
    3. Tambor, Marzena & Pavlova, Milena & Rechel, Bernd & Golinowska, Stanisława & Sowada, Christoph & Groot, Wim, 2014. "Willingness to pay for publicly financed health care services in Central and Eastern Europe: Evidence from six countries based on a contingent valuation method," Social Science & Medicine, Elsevier, vol. 116(C), pages 193-201.
    4. Rosas, Francisco & Acerenza, Santiago & Orazem, Peter, 2016. "Optimal pricing strategies for a cluster of goods: Own- and cross-price effects with correlated tastes," ISU General Staff Papers 201611300800001008, Iowa State University, Department of Economics.
    5. Fosgerau, Mogens & Karlström, Anders, 2010. "The value of reliability," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 38-49, January.
    6. Danyliv, Andriy & Groot, Wim & Gryga, Irena & Pavlova, Milena, 2014. "Willingness and ability to pay for physician services in six Central and Eastern European countries," Health Policy, Elsevier, vol. 117(1), pages 72-82.
    7. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    8. repec:eee:enepol:v:110:y:2017:i:c:p:288-302 is not listed on IDEAS

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