Venue: The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, NC 27708-0120
Presentation
Measuring the Value of a Pneumococcal Vaccine in Bangladesh: A Comparison of Multiple Contingent Valuation Elicitation Methods
Background: Contingent valuation studies aim to value a health care interventions by eliciting an individual's maximum willingness to pay. While they have been increasingly used as a health evaluation tool - and frequently used by decision makers - there is strong evidence to indicate that the elicitation format can impact results. Despite the existence of go government recommendations on the topic, the appropriate format of methods continues to be highly debated among practitioners of the methods.
Aim: To determine which contingent valuation elicitation formats are optimal for the determination of treatment value. Unlike existing hypothesizes that focus on potential sources of biases based on framing effects, we focus on the original theoretical demand and valuation, and the subtle difference in the theoretical and mathematical foundations of the elicitation formats.
Methods: Our research applies contingent valuation to the issue of Pneumococcal Vaccine in Dhaka, Bangladesh. A total of 330 households with at least one child under-five years of age were recruited and were randomized to one of three elicitation groups utilizing open-ended, payment card and dichotomous choice methodologies. The dichotomous choice was then followed up with a bidding methodology. All groups were comparable in terms of socio-economic status.
Results: Our findings are consistent with previous studies that the different elicitation format do give rise to different estimates of demand; however, we explain this variation by exploring the theoretical foundations of each method: dichotomous choice methods focus on estimating a demand curve (price is a function of quantity), while the payment card, open-ended and bidding game produce inverse demand function (quantity is a function of price).
Conclusions: When choosing an elicitation format, it is important to first consider the purpose and use of the data. Each elicitation method has strengths and weaknesses and can be used for different economic measurements. If one is measuring quantity, market shares, or elasticity of demand one should use a format that produces a demand curve. For the purpose of a welfare economics analysis one must select a format that produces an inverse demand curve. For this purpose, this study supports the use of the bidding game as it is most sensitive to construct validity tests and the primary bias, starting point, can be adjusted for in a regression analysis.