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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

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  • Awad Mataria
  • Stéphane Luchini
  • Yousef Daoud
  • 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.

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  • 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, October.
    • Handle: RePEc:wly:hlthec:v:16:y:2007:i:10:p:1051-1068
    DOI: 10.1002/hec.1216
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    8. 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.

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