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The Impact of Incentives on Valuing Health Risks.
Maria José Gil-Moltó1, Arne Risa Hole1, Henrik Andersson2,3
1Universitat Jaume I, Castellón de la Plana, Spain.
Health Economics
|July 12, 2025
Summary
Discrete Choice Experiments (DCEs) for valuing health risks show scope insensitivity, regardless of incentives. Incentives did not improve sensitivity to risk reduction magnitude in value of statistical life (VSL) estimations.
Area of Science:
- Environmental Economics
- Health Economics
- Behavioral Economics
Background:
- Discrete Choice Experiments (DCEs) are widely used to estimate health risk values.
- Existing research indicates potential insensitivity to scope in DCEs, where risk reduction magnitude inadequately influences valuations.
- This phenomenon, termed insensitivity to scope, raises concerns about the reliability of stated-preference valuations.
Purpose of the Study:
- To investigate the impact of incentives on scope sensitivity in DCEs for estimating the value of a statistical life (VSL).
- To compare VSL estimates derived from incentivized and unincentivized DCEs.
- To determine if incentive structures mitigate the scope insensitivity problem in health risk valuation.
Main Methods:
- Utilized a two-arm experimental design for DCEs.
- One arm employed a standard unincentivized DCE.
- The second arm used an incentivized DCE with real monetary payments.
- Analyzed differences in VSL estimates and scope sensitivity between the two arms.
Main Results:
- VSL estimates were higher in the unincentivized DCE arm compared to the incentivized arm.
- Evidence of external insensitivity to scope was found in both experimental arms.
- Weak evidence suggested stronger internal scope sensitivity in the incentivized arm.
Conclusions:
- The hypothetical nature of payments in stated-preference valuations is not the sole cause of scope insensitivity.
- Incentives in DCEs may influence VSL estimates but do not fully resolve the issue of scope insensitivity.
- Further research is needed to understand and address scope insensitivity in health risk valuation studies.
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