Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

This session will illustrate important applications of a growing technique in the field of health economics, conjoint analysis (CA), also known as stated choice (SC) analysis, or discrete choice experiments (DCEs). Based on utility-theoretic principles, conjoint analysis allows researchers to estimate preference parameters in realistic settings where revealed preference data does not exist or is limited.

These presentations are grouped together under a common research objective of modeling health-risk tradeoffs using random utility models and a common theme of probabilistic events. We model potential risk-averting behaviors that either reduce the probability that a negative health event (i.e., disease or illness) occurs or that mitigate risk by reducing the severity of a negative event, if it occurs (i.e., insurance). Mansfield et al.'s research focuses on food safety decisions and risks; Pattanayak et al.'s research focuses on water source consumption decisions and waterborne illness risks; and Brown et al.'s on prevention of sexually transmitted disease risks through vaccination.

In each application, CA methods are used to unpack the different attributes that inform individual decisions, including risk, severity, side effects, convenience, and price. Alternative policy tools and risk-averting behaviors involve tradeoffs among these different features. CA methods allow us to estimate the relative importance of each attribute, the willingness to pay for changes in each attribute, and the overall potential welfare gain (i.e., the compensating variation) associated with different policies.

All research addresses both the "equity" and "efficiency" aspects of the ASHE 2008 conference theme ("equity and efficiency in health and healthcare"). "Efficiency" is addressed through the welfare estimates, and the identification of optimal policies that are consistent with stated preferences about each attribute. "Equity" is addressed through the fact that all analyses use modern econometric methods (i.e., mixed logit) to model unobserved heterogeneity and explore differences and inequities between population segments. For instance, do socially optimal policies benefit different population segments disproportionately? Pattanayak et al.'s research also focuses on a developing country. Brown et al.'s research includes a model and results on discordance in parent-child preferences and intra-household decision-making, an understudied area in the literature.

The roster of session participants spans several institutions and a diversity of both U.S. and international perspectives. Presenting authors are affiliated with RTI International, a nonprofit research organization conducting applied economic research. Discussants will provide U.S. and international academic and government perspectives. Co-authors are affiliated with other academic institutions and nonprofit organizations.

Session attendees will learn about different contexts in which conjoint analysis can be applied; how the method can be used in a practical sense to inform public health policy; and the perspectives of U.S. and international participants on the methods and results.