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Economic evaluation of health effects with preference imprecision
Author(s) -
Vázquez María Xosé,
Araña Jorge E.,
León Carmelo J.
Publication year - 2006
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1079
Subject(s) - contingent valuation , econometrics , preference , preference elicitation , context (archaeology) , bayesian probability , estimation , willingness to pay , economics , interval (graph theory) , statistics , computer science , mathematics , microeconomics , geography , management , archaeology , combinatorics
The estimation of economic benefits of health effects through direct methods, such as contingent valuation, presents the problem of preference imprecision. This paper deals with this problem by proposing an elicitation method that allows the subject to state an interval for willingness to pay, without inducing any specific amount as a response. The paper also analyzes the effects of the context where changes in health occur on the associated imprecision level and the estimates, by comparing a situation without context with another in which effects are due to atmospheric pollution. The econometric modelling develops a Bayesian estimation method for censored intervals, which models the existing uncertainty between the lower and upper limits derived from the elicitation process. Results prove that data dispersion is significantly higher for the non‐contextual scenario, and increases for the most severe symptoms. Copyright © 2006 John Wiley & Sons, Ltd.