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“Institutionalization aversion” and the willingness to pay for home health care

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  • Costa-Font, Joan

Abstract

We examine the presence of a systematic preference for independent living at old age which we refer as “institutionalization aversion” (IA). Given that IA is not observable from revealed preferences, we draw on a survey experiment to elicit individuals’ willingness to pay (WTP) to avoid institutionalization (e.g., in a nursing home), using a single and double-bounded referendum WTP format. Our results suggest robust evidence of IA and reveal a willingness to pay of up to 16% of respondent's average income of individuals over fifty-five years of age. We find that the estimated willingness to pay to avoid institutionalization (€292) exceeds the amount respondents are willing to pay for home health care at old age in the event of a mild impairment (€222). WTP estimates vary with income, age and especially, respondents’ housing conditions. Finally, we test the sensitivity of our estimates to anchoring effects and ‘yea-saying’ biases.

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  • Costa-Font, Joan, 2017. "“Institutionalization aversion” and the willingness to pay for home health care," Journal of Housing Economics, Elsevier, vol. 38(C), pages 62-69.
    • Handle: RePEc:eee:jhouse:v:38:y:2017:i:c:p:62-69
    DOI: 10.1016/j.jhe.2017.10.001
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    Cited by:

    1. Bertrand Achou & Philippe De Donder & Franca Glenzer & Minjoon Lee & Marie-Louise Leroux, 2023. "At Home versus in a Nursing Home: Long-term Care Settings and Marginal Utility," CIRANO Working Papers 2023s-14, CIRANO.
    2. Costa-Font, Joan & Vilaplana-Prieto, Cristina, 2022. "Health shocks and housing downsizing: How persistent is ‘ageing in place’?," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 490-508.
    3. Akaichi, Faical & Costa-Font, Joan & Frank, Richard, 2020. "Uninsured by Choice? A choice experiment on long term care insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 422-434.
    4. Marta Pascual-Sáez & David Cantarero-Prieto & Carla Blázquez-Fernández, 2019. "Partner’s depression and quality of life among older Europeans," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1093-1101, September.
    5. Florentino Felgueroso & Angel de la Fuente & José E. Boscá & Joan Costa i Font & Rafael Doménech & Javier Ferri & José I. García Pérez & Sergi Jiménez & Diego Rodríguez & Analía Viola, 2020. "Aspectos económicos de la crisis del Covid-19. Boletín de seguimiento nº2," Studies on the Spanish Economy eee2020-14, FEDEA.
    6. Amilon, Anna & Kjær, Agnete Aslaug & Ladenburg, Jacob & Siren, Anu, 2022. "Trust in the publicly financed care system and willingness to pay for long-term care: A discrete choice experiment in Denmark," Social Science & Medicine, Elsevier, vol. 311(C).
    7. Sergi Jiménez-Martín & Analía Viola, 2020. "La asistencia residencial en España y COVID-19," Studies on the Spanish Economy eee2020-20, FEDEA.
    8. Johannes Geyer & Peter Haan & Mia Teschner, 2024. "The Impact of Macroeconomic Conditions on Long-Term Care: Evidence on Prices," Discussion Papers of DIW Berlin 2096, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    Institutionalisation aversion; State-dependent preferences; Home health care; Willingness to pay; Caregiving; Referendum format;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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