Venue: The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, NC 27708-0120

 

Presentation

Does Mothers' Willingness To Pay for Children's Health Differ from Fathers??

Authors: Soyeon Guh (University of North Carolina at Chapel Hill)

Presenter: Soyeon Guh (University of North Carolina at Chapel Hill)

Discussant: Benjamin M. Craig (H. Lee Moffitt Cancer Center & Research Institute)

Session: WTP

Room: Geneen Auditorium

When: Monday 5:15 p.m. - 6:45 p.m.

To date the health valuation studies have relied on unitary household decision making model, in which a household is assumed to maximize a single utility. The simple theoretical assumptions, i.e., homogenous preference and income pooling hypothesis, turns out restrictive to address intra-household resource allocation among several household members. Empirically the key assumptions the unitary model pose have been rejected when tested. As a counter-interest, non?unitary models have developed in order to relax these restrictive assumptions. Non?unitary models take each family member as the unit of analysis and treat household decisions as the outcomes of interactions among family members. They are more flexible to explain possible differences in willingness to pay (WTP) by the two sexes for children's health in a household.

In order to separately derive mothers' WTP for increasing one additional healthy day of children from fathers', I combine health production function with a collective household model, one of non-unitary household model, and investigate intra-household allocation of both caring time and medical expenditures for sick children between the mother and the father. I use potential welfare benefits as one of measures to capture 'power' by sex in a household. I assume that the relative bargaining power of the two sexes is decided by the actual amounts of economic resources, as well as welfare benefit potentially eligible for single mothers in an event of divorce.

Then, I compare individual WTP obtained with the combined health production model with collective household model with household WTP obtained with the unitary model. Here I focus on the quantitative discrepancies entailed by the use of a unitary model when assessing children's healthy day. In addition, differences of WTP estimates between a mother and a father for the health of their children hence suggest that increased interest and efforts should be devoted to non-unitary household model.