The insensitivity of `willingness-to-pay' to the size of the good: New evidence for health care

• DOI: 10.1016/s0167-4870(03)00029-1
• Publication Date: 2003-04-25T02:16:19Z
• Authors: Jan Abel Olsen; Cam Donaldson; João Pereira
• Keywords: 03 medical and health sciences; 0305 other medical science; 3. Good health

This paper inquires into the existence of two types of scope insensitivity in health care; one deals with different numbers of patients treated from a programme, the other with different reductions in the risk of heart attack. Two empirical studies in Norway and Portugal were designed to measure the extent to which willingness-to-pay (WTP) varies with the size of health outcomes. Comparisons of WTP with different sizes of the goods were undertaken both across samples and within samples. The results showed no statistically significant differences in WTP with different sized health effects, something that casts doubt on the reliability of the WTP-method as an instrument for comparing the social values of competing health care programmes.