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Manchester Centre for Health Economics Seminar Series

Dates:28 October 2013
Times:14:00 - 15:00
What is it:Seminar
Organiser:Institute of Population Health
Who is it for:Adults, Current University students, University staff
Speaker:Mandy Ryan
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  • By Institute of Population Health

Host: Institute of Population Health

Title: External Validity of Contingent Valuation: a Field Experiment Comparing Hypothetical and Real Payments

Authors:

Mandy Ryan:

Health Economics Research Unit, University of Aberdeen; Emmanouil Mentzakis - Economics Division, University of Southampton; Sutthi Jareinpituk - Department of Dental Public health, Mahidol University; John Cairns - Department of Health Services Research and Policy, London School of Hygiene and Tropical Medicine.

Background:

Contingent valuation (CV) is being increasingly used in health economics to generate willingness to pay (WTP) values for health and health care. An ongoing concern is whether the values generated in a hypothetical survey reflect real behaviour.

Aim and methods:

This study presents the first within sample field experiment in health economics assessing the external validity of both the dichotomous choice (DC) and payment card (PC) CV approaches. The context is the value of a prepayment dental plan in Thailand. WTP values are elicited hypothetically and subsequently subjects are asked to pay their stated value. Both non-parametric and parametric calibration methods are considered as ways to reduce hypothetical bias. We also borrow calibration parameters from a previous study and test their effectiveness in reducing our hypothetical bias.

Results:

No difference in subjects' characteristics across hypothetical and real samples are observed. Evidence of hypothetical bias is found with the proportion of hypothetical yes responses exceeding actual yes responses for both DC and PC formats. The bias is further present when calculating WTP values, with hypothetical figures overstating actual valuations. Non-parametric calibration (both verbal and numerical) corrects for hypothetical bias both in the proportion of responses and the WTP values. Parametric calibration is effective with a high number of correct individual predictions. Whilst external calibration resulted in a significant improvement in correct individual predictions, hypothetical Yes responses were still significantly higher than actual Yes responses.

Discussion:

Collecting data on degree of certainty improves the predictive validity of actual WTP and should be collected in WTP surveys.

Speaker

Mandy Ryan

Role: Professor of Health Economics

Organisation: Health Economics Research Unit, University of Aberdeen

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