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Measuring Willingness-To-Pay for Risk Reduction: An Application of Conjoint Analysis

Author

Listed:
  • Harry Telser

    (Socioeconomic Institute, University of Zurich)

  • Peter Zweifel

    (Socioeconomic Institute, University of Zurich)

Abstract

This study applies conjoint analysis (CA) to estimate the marginal willingness-to-pay (MWTP) of elderly individuals for a reduction of the risk of fracture of the femur. The good in question are hypothetical hip protectors which lower the risk of a fracture by different amounts. Other attributes are ease of handling, wearing comfort, and out-of-pocket cost. Thus, the novelty of the present work lies in its letting risk reduction be traded off against several attributes. In 500 face-to-face interviews, pensioners stated whether or not they would buy the product. Results suggest that MWTP for wearing comfort exceeds that for risk reduction. Indeed, willingness- to-pay for the product as a whole is negative, indicating that it should not be included as a mandatory benefit in health insurance.

Suggested Citation

  • Harry Telser & Peter Zweifel, 2000. "Measuring Willingness-To-Pay for Risk Reduction: An Application of Conjoint Analysis," SOI - Working Papers 0003, Socioeconomic Institute - University of Zurich.
    • Handle: RePEc:soz:wpaper:0003
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    File URL: https://www.econ.uzh.ch/apps/workingpapers/wp/wp0003.pdf
    File Function: First version, 2000
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    Citations

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    Cited by:

    1. Peter Zweifel, 2001. "Eine Gesundheitspolitik f?r das 21. Jahrhundert: Zehn Reformvorschläge," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 2(1), pages 81-98, February.
    2. Rainer Winkelmann, 2002. "Work and health in Switzerland: Immigrants and Natives," SOI - Working Papers 0203, Socioeconomic Institute - University of Zurich.

    More about this item

    Keywords

    Conjoint Analysis; Risk Reduction; Willingness-To-Pay; Discrete-Choice Experiments;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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