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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

  • 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

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.

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File URL: http://hdl.handle.net/10.1002/hec.1216
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 10 ()
Pages: 1051-1068

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:10:p:1051-1068
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-66, March.
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  8. Onwujekwe, Obinna & Hanson, Kara & Fox-Rushby, Julia, 2005. "Do divergences between stated and actual willingness to pay signify the existence of bias in contingent valuation surveys?," Social Science & Medicine, Elsevier, vol. 60(3), pages 525-536, February.
  9. Stewart, Jennifer M. & O'Shea, Eamon & Donaldson, Cam & Shackley, Phil, 2002. "Do ordering effects matter in willingness-to-pay studies of health care?," Journal of Health Economics, Elsevier, vol. 21(4), pages 585-599, July.
  10. Mataria, Awad & Donaldson, Cam & Luchini, Stephane & Moatti, Jean-Paul, 2004. "A stated preference approach to assessing health care-quality improvements in Palestine: from theoretical validity to policy implications," Journal of Health Economics, Elsevier, vol. 23(6), pages 1285-1311, November.
  11. Chernichovsky, Dov & Meesook, Oey Astra, 1986. "Utilization of health services in Indonesia," Social Science & Medicine, Elsevier, vol. 23(6), pages 611-620, January.
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  13. Litvack, Jennie I. & Bodart, Claude, 1993. "User fees plus quality equals improved access to health care: Results of a field experiment in Cameroon," Social Science & Medicine, Elsevier, vol. 37(3), pages 369-383, August.
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