Estimating willingness-to-pay using discrete choice experiment
At present there are no nephrology facilities in Greenland. Greenlandic patients with renal failure needing dialysis thus have to travel to Denmark to obtain treatment. For patients in haemodialysis this necessitates a permanent residence in Denmark. Our study was aimed at examining Greenlanders' preferences for establishing nephrology facilities in Greenland at Queen Ingrid's Hospital in Nuuk, and to estimate the associated change in welfare. Preferences were elicited using a discrete choice experiment (DCE). A random sample of 500 individuals of the general population was sent a postal questionnaire in which they were asked to consider the trade-offs of establishing nephrology facilities in Greenland as opposed to the current situation. This involved trading off the benefits of having such facilities in their home country against the costs of the intervention. Besides including a payment attribute described in terms of incremental tax payment, the DCE included two interventions attributes related to (1) the organisation of labour, and (2) the physical settings of the patients. Respondents succeeded in answering the DCE despite cultural and linguistic disparity. We found that all the included attributes had a significant effect on respondents' choices, and that respondents' answers to the DCE were in keeping with their values as stated in the questionnaire. DCE data was analyzed using a random parameter logit model reparametrized in willingness-to-pay space. The results showed that establishing facilities in Greenland were preferred to the current treatment in Denmark. The welfare estimate from the DCE, at DKK 18.74 million, exceeds the estimated annual costs of establishing treatment facilities for patients with chronic renal failure. Given the estimated confidence interval this result seems robust. Establishing facilities in Greenland therefore would appear to be welfare-improving, deriving positive net benefits. Despite the relatively narrow policy focus, we believe that our findings provide some insight into individuals' preferences for decentralization of public services and on citizens' views of 'self-governance' that go beyond the case of Greenland. More generally, this paper illustrates how DCE can be applied successfully to developing countries with culturally, demographically, and geographically distinct features.
European Journal of Health Economics, 2013, Vol 14, Issue 5, p. 739-748
Ambulatory Care Facilities/*supply & distribution Confidence Intervals Consumer Satisfaction Female *Financing, Personal Greenland *Health Services Needs and Demand Humans Kidney Failure, Chronic/therapy Logistic Models Male Medical Tourism Middle Aged Models, Econometric *Nephrology *Public Opinion Questionnaires Renal Dialysis/*economics