Willingness to pay for improved respiratory and cardiovascular health: a multiple-format, stated-preference approach

This study uses stated-preference (SP) analysis to measure willingness to pay (WTP) to reduce acute episodes of respiratory and cardiovascular ill health. The SP survey employs a modified version of the health state descriptions used in the Quality of Well Being (QWB) Index. The four health state attributes are symptom, episode duration, activity restrictions and cost. Preferences are elicited using two different SP formats: graded-pair and discrete-choice. The different formats cause subjects to focus on different evaluation strategies. Combining two elicitation formats yields more valid and robust estimates than using only one approach. Estimates of indirect utility function parameters are obtained using advanced panel econometrics for each format separately and jointly. Socio-economic differences in health preferences are modelled by allowing the marginal utility of money relative to health attributes to vary across respondents. Because the joint model captures the combined preference information provided by both elicitation formats, these model estimates are used to calculate WTP. The results demonstrate the feasibility of estimating meaningful WTP values for policy-relevant respiratory and cardiac symptoms, even from subjects who never have personally experienced these conditions. Furthermore, because WTP estimates are for individual components of health improvements, estimates can be aggregated in various ways depending upon policy needs. Thus, using generic health attributes facilitates transferring WTP estimates for benefit-cost analysis of a variety of potential health interventions.