Willingness to pay for public health services in rural Central Java, Indonesia: methodological considerations when...

Area of Science:

• Health Economics
• Public Health Policy
• Behavioral Economics

Background:

• Contingent valuation method (CVM) studies on willingness to pay (WTP) are used in low- and middle-income countries to inform health pricing and policy.
• Existing CVM studies often assess expressed preferences without considering actual affordability, potentially leading to inaccurate demand estimations.

Purpose of the Study:

• To examine the issues related to willingness to pay (WTP) estimation for health services using the conventional contingent valuation method (CVM).
• To assess the difference between conventional WTP estimates and WTP considering budget constraints, specifically the scenario of resorting to debt.

Main Methods:

• Conducted 202 household interviews in Indonesia in 2008.
• Assessed willingness to pay (WTP) for three public health services using conventional CVM and a debt-resorting scenario to account for budget constraints.

Main Results:

• Demand curves for both WTP scenarios exhibited gaps, indicating discrepancies between expressed and actual ability to pay.
• The gap for midwife services was negatively correlated with household income and was larger for poorer households.
• WTP elicited by conventional CVM differed from the maximum price preventing respondents from resorting to debt.

Conclusions:

• Conventional CVM studies may not accurately reflect true willingness to pay (WTP) when budget constraints are considered.
• Findings suggest that relying solely on CVM WTP for health service pricing could worsen access inequities, particularly for vulnerable populations.
• Future CVM research should refine scenarios to better capture realistic WTP and budget constraints.