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Willingness to pay for health insurance in the informal sector of Sierra Leone

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  • Mireia Jofre-Bonet
  • Joseph Kamara

Abstract

Purpose: The objective of this project is to study the willingness to pay (WTP) for health insurance (HI) of individuals working in the informal sector in Sierra Leone, using a purposely-designed survey of a representative sample of this sector. Methods: We elicit the WTP using the Double-Bounded Dichotomous Choice with Follow Up method. We also examine the factors that are positively and negatively associated with the likelihood of the respondents to answer affirmatively to joining a HI scheme and to paying three different possible premiums, to join the HI scheme. We additionally analyze the individual and household characteristics associated with the maximum amount the household is willing to pay to join the HI scheme. Results: The results indicate that the average WTP for the HI is 20,237.16 SLL (3.6 USD) per adult but it ranges from about 14,000 SLL (2.5 USD) to about 35,000 SLL (6.2 USD) depending on region, occupation, household and respondent characteristics. The analysis of the maximum WTP indicates that living outside the Western region and working in farming instead of petty trade are associated with a decrease in the maximum premium respondents are WTP for the HI scheme. Instead, the maximum WTP is positively associated to being a driver or a biker; having secondary or tertiary education (as opposed to not having any); the number of pregnant women in the household; having a TV; and, having paid for the last medical requirement. Conclusions: In summary, the various analyses show that a premium for the HI package could be set at approximately 20,000 SLL (3.54 USD) but also that establishing a single premium for all individuals in the informal sector could be risky. The efficient functioning of a HI scheme relies on covering as much of the population as possible, in order to spread risks and make the scheme viable. The impact of the various population characteristics raises the issue of how to rate premiums. In other words, setting a premium that may be too high for a big proportion of the population could mean losing many potential enrollees and might have viability consequences for the operation of the scheme.

Suggested Citation

  • Mireia Jofre-Bonet & Joseph Kamara, 2018. "Willingness to pay for health insurance in the informal sector of Sierra Leone," PLOS ONE, Public Library of Science, vol. 13(5), pages 1-18, May.
    • Handle: RePEc:plo:pone00:0189915
    DOI: 10.1371/journal.pone.0189915
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    References listed on IDEAS

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    1. David Mark Dror, 2018. "Systematic Review of Willingness to Pay for Health Insurance in Low and Middle Income Countries," World Scientific Book Chapters, in: Financing Micro Health Insurance Theory, Methods and Evidence, chapter 8, pages 151-168, World Scientific Publishing Co. Pte. Ltd..
    2. Pinuccia Calia & Elisabetta Strazzera, 2000. "Bias and efficiency of single versus double bound models for contingent valuation studies: a Monte Carlo analysis," Applied Economics, Taylor & Francis Journals, vol. 32(10), pages 1329-1336.
    3. Jofre-Bonet, Mireia & Kamara, Joseph, 2018. "Willingness to pay for health insurance in the informal sector of Sierra Leone," LSE Research Online Documents on Economics 89836, London School of Economics and Political Science, LSE Library.
    4. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    5. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326, June.
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    1. Soeb Md. Shoayeb Noman, 2021. "Government Employees of Bangladesh and their Willingness to Pay for Social Health Insurance," Business and Economic Research, Macrothink Institute, vol. 11(2), pages 207-217, June.
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    4. Monica Ewomazino Akokuwebe & Erhabor Sunday Idemudia, 2022. "A Comparative Cross-Sectional Study of the Prevalence and Determinants of Health Insurance Coverage in Nigeria and South Africa: A Multi-Country Analysis of Demographic Health Surveys," IJERPH, MDPI, vol. 19(3), pages 1-26, February.
    5. Jofre-Bonet, Mireia & Kamara, Joseph, 2018. "Willingness to pay for health insurance in the informal sector of Sierra Leone," LSE Research Online Documents on Economics 89836, London School of Economics and Political Science, LSE Library.
    6. Muttaqien Muttaqien & Hermawati Setiyaningsih & Vini Aristianti & Harry Laurence Selby Coleman & Muhammad Syamsu Hidayat & Erzan Dhanalvin & Dedy Revelino Siregar & Ali Ghufron Mukti & Maarten Olivier, 2021. "Why did informal sector workers stop paying for health insurance in Indonesia? Exploring enrollees’ ability and willingness to pay," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-19, June.

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