Premium
Parental beliefs and willingness to pay for reduction in their child's asthma symptoms: A joint estimation approach
Author(s) -
Mussio Irene,
Brandt Sylvia,
Hanemann Michael
Publication year - 2021
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.4181
Subject(s) - willingness to pay , asthma , endogeneity , contingent valuation , valuation (finance) , unobservable , medicine , revealed preference , economics , worry , amenity , actuarial science , econometrics , psychiatry , microeconomics , anxiety , finance
Many aspects of asthma—in particular the relationship between beliefs, averting behaviors, and symptoms—are not directly observable from market data. An approach that combines observable market data with nonmarket valuation to gather data on unobservable aspects of the illness can improve efforts to quantify the burden of asthma if it accounts for the endogeneity in the system. Such approaches are used in the valuation of recreation but have not been widely used to value the burden of a chronic illness. We estimate parents' willingness to pay (WTP) to reduce their child's asthma symptoms using a three‐equation model that combines revealed preference, contingent valuation, and burden of asthma, increasing the efficiency of estimation and correcting for endogeneity. WTP for a device that reduces a child's asthma symptoms by 50% is $125/month (s.d. $20). Parents' valuations are driven by beliefs about asthma and by their degree of worry about asthma between episodes. There is a nonlinear relationship between the number of days with symptoms and WTP per symptom day. The experience of living with asthma affects families' responses to a contingent valuation scenario, because it influences willingness to spend money to manage the illness and their subjective perceptions and beliefs about the illness itself.