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Welfarism or non-welfarism? Public preferences for willingness to pay versus health maximisation

Listed author(s):
  • John McKie


    (Centre for Health Economics, Monash University)

  • Jeff Richardson


    (Centre for Health Economics, Monash University)

  • Jan Olsen

    (Institute of Community Medicine, University of Tromso)

We distinguish between different forms of welfarism and non-welfarism, along three dimensions: “self-motivation”, “social goal”, and “role of government”. The paper then reports the results of a survey of the “meta-preferences” of the Australian public concerning the principles that should govern priority setting in health care. Of 743 respondents, 77.4 per cent thought that resources should be allocated on the basis of health outcomes (non-welfarism), whereas only 11.6 per cent thought that priorities should reflect individuals’ preferences as stated through willingness to pay (welfarism). The Discussion section considers three arguments supporting WTP: first, that it is the “theoretically correct” method for valuing health effects due to its foundation in welfare economics; second, that it is the most flexible technique for evaluating health services, as it is able to include a variety of factors in addition to health that are important to individuals; and third, that it places a dollar value on life and quality of life, which is necessary if allocative efficiency is to be achieved. We argue that these arguments for individual WTP are unpersuasive.

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Paper provided by Monash University, Centre for Health Economics in its series Centre for Health Economics Research Papers with number 10/05.

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Length: 14 pages
Date of creation: Aug 2005
Handle: RePEc:mhe:cherps:2005-10
Contact details of provider: Postal:
Centre for Health Economics, Monash University, Building 75, Clayton, Victoria 3800, Australia

Phone: +61-3-9905-0733
Fax: +61-3-9905-8344
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