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Modelling Heterogeneity and Uncertainty in Contingent Valuation: an Application to the Valuation of Informal Care
Author(s) -
Mentzakis Emmanouil,
Ryan Mandy,
McNamee Paul
Publication year - 2014
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/sjpe.12032
Subject(s) - valuation (finance) , contingent valuation , economics , certainty , actuarial science , market value , econometrics , health care , public economics , microeconomics , willingness to pay , mathematics , economic growth , finance , geometry
Both the lack of market data and the need to adopt a more holistic approach in the valuation of non‐market activities within health care have pointed towards the use of contingent valuation ( CV ) methods. However, to date, few studies have employed such techniques to value informal care, despite its provision being an important public policy question. We propose an analytical framework that through the use of random parameters models and respondents' certainty scales can incorporate both unobserved and observed heterogeneity in the CV modelling. This is the first CV study of informal care for Scotland ( UK ) and a £7.68 per hour value is estimated.