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A comparison of approaches to estimating confidence intervals for willingness to pay measures

Author

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  • Arne Risa Hole

    () (National Primary Care Research and Development Centre, Centre for Health Economics, University of York)

Abstract

This paper describes three approaches to estimating confidence intervals for willingness to pay measures, the delta, Krinsky and Robb and bootstrap methods. The accuracy of the various methods is compared using a number of simulated datasets. In the majority of the scenarios considered all three methods are found to be reasonably accurate as well as yielding similar results. The delta method is the most accurate when the data is well-conditioned, while the bootstrap is more robust to noisy data and misspecification of the model. These conclusions are illustrated by empirical data from a study of willingness to pay for a reduction in waiting time for a general practitioner appointment in which all the methods produce fairly similar confidence intervals.

Suggested Citation

  • Arne Risa Hole, 2006. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Working Papers 008cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:8cherp
    as

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    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp8_comparison_of_approaches_to_estimating_confidence_intervals_for_WTP.pdf
    File Function: First version, 2006
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    References listed on IDEAS

    as
    1. Kling, Catherine L., 1991. "Estimating the precision of welfare measures," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 244-259, November.
    2. Krinsky, Itzhak & Robb, A Leslie, 1991. "Three Methods for Calculating the Statistical Properties of Elasticities: A Comparison," Empirical Economics, Springer, vol. 16(2), pages 199-209.
    3. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    4. Guilkey, David K. & Murphy, James L., 1993. "Estimation and testing in the random effects probit model," Journal of Econometrics, Elsevier, vol. 59(3), pages 301-317, October.
    5. Krinsky, Itzhak & Robb, A Leslie, 1990. "On Approximating the Statistical Properties of Elasticities: A Correction," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 189-190, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Melanie Lefevre, 2011. "Willingness-to-pay for Local Milk-based Dairy Product in Senegal," CREPP Working Papers 1108, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    2. Bénédicte Rulleau & Jeoffrey Dehez & Patrick Point, 2011. "The tourist recreational demand for coastal forests: Do forests really matter?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(3), pages 291-310.
    3. William Jack & Joose De Laat & Kara Hanson & Agnes Soucat, 2010. "Incentives and Dynamics in the Ethiopian Health Worker Labor Market," World Bank Publications, The World Bank, number 5951, Juni.
    4. Christopher A. Wolf & Frank Lupi & Stephen Harsh, 2011. "Farmer demand for financial record-keeping system attributes," Agricultural Finance Review, Emerald Group Publishing, vol. 71(2), pages 259-276, August.
    5. Godager, Geir & Wiesen, Daniel, 2013. "Profit or patients’ health benefit? Exploring the heterogeneity in physician altruism," Journal of Health Economics, Elsevier, vol. 32(6), pages 1105-1116.
    6. Julie Poirier, 2012. "How to Deal with Protest Bids and Preference for the Status Quo in Choice Experiments ?," Working Papers 2012-02, Center for Research in Economics and Statistics.
    7. Eleni Fimereli & Susana Mourato, 2013. "Assessing the effect of energy technology labels on preferences," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(3), pages 245-265, November.
    8. Mann, John T. & Henneberry, Shida Rastegari, 2012. "Undergraduate Students’ Preferences and Willingness to Pay for College Course Attributes," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124946, Agricultural and Applied Economics Association.

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