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Conjoint analysis. The cost variable: an Achilles' heel?

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  • Ulla Slothuus Skjoldborg
  • Dorte Gyrd‐Hansen

Abstract

This paper seeks to enlighten the readers on the potential complexities involved in including cost variables in conjoint analysis, with the aim of emphasising that interpretation of implicit WTP values should be tackled with caution. To illustrate the potential pitfalls, a large data set from a recent Danish study is applied. The data consists of 1991 interviews in which participants are required to perform three discrete choice tasks regarding choice of hospitals, and three choice tasks involving health‐care systems in general. Model comparisons are performed which test the effect of (1) the cost range applied and (2) the effect of including a dummy variable to represent the utility associated with payment per se. A wider cost range including higher payments is associated with lower parameter weights associated with the payment variable, and thus increased WTP values. Including a dummy variable to explain utility associated with payment per se has significant effects on the model incurring some of the other variables to become insignificant, and others to change sign. Results suggest that inclusion of a two‐dimensional structure to explain the relationship between cost and utility may avoid erroneous conclusions and give rise to significant changes in implicit WTP estimates. Copyright © 2002 John Wiley & Sons, Ltd.

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  • Ulla Slothuus Skjoldborg & Dorte Gyrd‐Hansen, 2003. "Conjoint analysis. The cost variable: an Achilles' heel?," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 479-491, June.
    • Handle: RePEc:wly:hlthec:v:12:y:2003:i:6:p:479-491
    DOI: 10.1002/hec.742
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    References listed on IDEAS

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    1. Mickael Bech & Trine Kjaer & Jørgen Lauridsen, 2011. "Does the number of choice sets matter? Results from a web survey applying a discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 273-286, March.
    2. Andersson, Henrik & Hole, Arne Risa & Svensson, Mikael, 2016. "Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 41-53.
    3. Jon Helgheim Holte & Peter Sivey & Birgit Abelsen & Jan Abel Olsen, 2016. "Modelling Nonlinearities and Reference Dependence in General Practitioners' Income Preferences," Health Economics, John Wiley & Sons, Ltd., vol. 25(8), pages 1020-1038, August.
    4. Sivey, Peter & Scott, Anthony & Witt, Julia & Joyce, Catherine & Humphreys, John, 2012. "Junior doctors’ preferences for specialty choice," Journal of Health Economics, Elsevier, vol. 31(6), pages 813-823.
    5. Angela Robinson & Judith Covey & Anne Spencer & Graham Loomes, 2007. "Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment," Working Papers 597, Queen Mary University of London, School of Economics and Finance.
    6. Milena Pavlova & Wim Groot & Godefridus Merode, 2005. "An Application of Rating Conjoint Analysis to Study the Importance of Quality-, Access- and Price-attributes to Health Care Consumers," Economic Change and Restructuring, Springer, vol. 37(3), pages 267-286, September.
    7. Michael Clark & Domino Determann & Stavros Petrou & Domenico Moro & Esther Bekker-Grob, 2014. "Discrete Choice Experiments in Health Economics: A Review of the Literature," PharmacoEconomics, Springer, vol. 32(9), pages 883-902, September.
    8. Mandeville, Kate L. & Ulaya, Godwin & Lagarde, Mylène & Muula, Adamson S. & Dzowela, Titha & Hanson, Kara, 2016. "The use of specialty training to retain doctors in Malawi: A discrete choice experiment," Social Science & Medicine, Elsevier, vol. 169(C), pages 109-118.
    9. Matthew Berman & Andrea Fenaughty, 2005. "Technology and managed care: patient benefits of telemedicine in a rural health care network," Health Economics, John Wiley & Sons, Ltd., vol. 14(6), pages 559-573, June.
    10. Mandy Ryan & Karen Gerard & Gillian Currie, 2012. "Using Discrete Choice Experiments in Health Economics," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 41, Edward Elgar Publishing.
    11. Laura Ternent & Aki Tsuchiya, 2013. "A Note on the Expected Biases in Conventional Iterative Health State Valuation Protocols," Medical Decision Making, , vol. 33(4), pages 544-546, May.
    12. Mickael Bech & Dorte Gyrd‐Hansen, 2005. "Effects coding in discrete choice experiments," Health Economics, John Wiley & Sons, Ltd., vol. 14(10), pages 1079-1083, October.
    13. Sever, Ivan & Verbič, Miroslav & Klarić Sever, Eva, 2019. "Cost attribute in health care DCEs: Just adding another attribute or a trigger of change in the stated preferences?," Journal of choice modelling, Elsevier, vol. 32(C), pages 1-1.
    14. Ebenezer Kwabena Tetteh & Steve Morris & Nigel Titcheneker-Hooker, 2017. "Discrete-choice modelling of patient preferences for modes of drug administration," Health Economics Review, Springer, vol. 7(1), pages 1-14, December.
    15. Esther W. de Bekker‐Grob & Mandy Ryan & Karen Gerard, 2012. "Discrete choice experiments in health economics: a review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 145-172, February.
    16. Angela Robinson & Judith Covey & Anne Spencer & Graham Loomes, 2007. "Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment," Working Papers 597, Queen Mary University of London, School of Economics and Finance.

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