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Use, option and externality values: are contingent valuation studies in health care mis‐specified?

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  • Richard D. Smith

Abstract

A general population sample of Australian respondents completed a contingent valuation (CV) survey that asked them to value six scenarios. These varied according to whether the scenario was seeking to elicit: (i) use value; (ii) externality value; (iii) option value; or (iv) a combination. Results indicate that use plus externality and/or option value was significantly greater than use value alone. As CV studies in health (care) overwhelmingly focus on use value alone – often implicitly through study design rather than explicitly – this raises the possibility of mis‐specification in CV research in health (care). The implications for CV in health (care) are considered. Copyright © 2006 John Wiley & Sons, Ltd.

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  • Richard D. Smith, 2007. "Use, option and externality values: are contingent valuation studies in health care mis‐specified?," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 861-869, August.
    • Handle: RePEc:wly:hlthec:v:16:y:2007:i:8:p:861-869
    DOI: 10.1002/hec.1189
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    References listed on IDEAS

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    1. Richard D. Smith, 2001. "The relative sensitivity of willingness‐to‐pay and time‐trade‐off to changes in health status: an empirical investigation," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 487-497, September.
    2. Smith, Richard D., 2005. "Sensitivity to scale in contingent valuation: the importance of the budget constraint," Journal of Health Economics, Elsevier, vol. 24(3), pages 515-529, May.
    3. Jan Abel Olsen & Richard D. Smith, 2001. "Theory versus practice: a review of ‘willingness‐to‐pay’ in health and health care," Health Economics, John Wiley & Sons, Ltd., vol. 10(1), pages 39-52, January.
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    3. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    4. Marie-Odile Carrère & Nathalie Havet & Magali Morelle & Raphaël Remonnay, 2008. "Analyzing the determinants of willingness-to-pay values for testing the validity of the contingent valuation method. Application to home care compared to hospital care," Post-Print halshs-00303725, HAL.
    5. Felipa de Mello-Sampayo, 2022. "On the timing and probability of Presurgical Teledermatology: how it becomes the dominant strategy," Health Care Management Science, Springer, vol. 25(3), pages 389-405, September.
    6. Jeremiah Hurley & Emmanouil Mentzakis & Mita Giacomini & Deirdre DeJean & Michel Grignon, 2017. "Non-market resource allocation and the public’s interpretation of need: an empirical investigation in the context of health care," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(1), pages 117-143, June.
    7. Ana Bobinac & N. Job A. van Exel & Frans F. H. Rutten & Werner B. F. Brouwer, 2013. "Valuing Qaly Gains By Applying A Societal Perspective," Health Economics, John Wiley & Sons, Ltd., vol. 22(10), pages 1272-1281, October.
    8. J. Jaime Caro & John E. Brazier & Jonathan Karnon & Peter Kolominsky-Rabas & Alistair J. McGuire & Erik Nord & Michael Schlander, 2019. "Determining Value in Health Technology Assessment: Stay the Course or Tack Away?," PharmacoEconomics, Springer, vol. 37(3), pages 293-299, March.
    9. Hurley, Jeremiah & Mentzakis, Emmanouil, 2013. "Health-related externalities: Evidence from a choice experiment," Journal of Health Economics, Elsevier, vol. 32(4), pages 671-681.
    10. Katona, Katalin, 2019. "Managed competition in practice : Lessons for healthcare policy," Other publications TiSEM 2c2dd13d-91a8-4706-b705-9, Tilburg University, School of Economics and Management.
    11. de Mello-Sampayo, F.;, 2024. "Uncertainty in Healthcare Policy Decisions: An Epidemiological Real Options Approach to COVID-19 Lockdown Exits," Health, Econometrics and Data Group (HEDG) Working Papers 24/01, HEDG, c/o Department of Economics, University of York.

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