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Order bias in estimates of willingness to pay for drugs to treat Attention-Deficit/Hyperactivity Disorder. A contingent valuation study among students

Listed author(s):
  • DE GRAEVE, Diana

OBJECTIVES: New drugs with extended release formulations are being developed to treat patients with ADHD. While currently available drugs need to be administered two or three times daily, the new medication offers the prospect of a once-daily administration with a more consistent working profile throughout the day. The purpose of the present study is twofold: 1) to establish WTP for this improved formulation as compared to WTP for the standard drug, and 2) to ascertain whether the order in which the drugs are presented to respondents influences the results obtained. METHODS: A pre-tested questionnaire was administered to 114 final-year economics students from the University of Antwerp. In order to simulate a binding income constraint, the students were told to consider themselves as the head of a household with a specified disposable income. The level of the income that was imposed varied. After receiving information about ADHD and about the available treatments, respondents’ WTP was elicited using the payment card method. Respondents could answer ‘yes’ or ‘no’ with varying degrees of certainty. A split sample was used to test the hypothesis that the order in which the drugs are presented in the survey is significant. RESULTS: The average willingness to pay per month amounts to €57.34 “definitely” and €74.29 “probably” for the standard drug and to €81.95 “definitely” and €95.12 “probably” for the new drug. The difference between the respective WTP for the drugs is statistically significant (Wilcoxon Signed Rank Test). Students state a higher WTP for the new drug if the standard therapy is presented first (Mann-Whitney U Test). CONCLUSIONS: The present study provides further evidence of the validity of the Contingent Valuation Method (CVM) for establishing WTP. It shows that WTP for drugs can be elicited from a student population with an imposed income. The study also shows that WTP for a new drug varies according to the order in which the respective drugs are presented. This may be due to order bias, evidence of which has also been found in other studies and which is considered to be a limitation of the method.

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Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2002041.

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Length: 20 pages
Date of creation: Dec 2002
Handle: RePEc:ant:wpaper:2002041
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