What is the best way to measure how much people are willing to pay for healthcare? We can check a test’s reliability by asking the same question at two points in time and comparing the responses. Research by the University of Heidelberg, Germany, the Nouna Health Research Centre in Burkina Faso, and the UK’s University of Aberdeen compared methods for assessing willingness-to-pay (WTP) for community-based health insurance in Nouna, Burkina Faso.

The two methods were:

• ‘Take it or leave it’ – participants decide whether they are willing to pay a certain amount for health insurance.
• The bidding game – if the answer to the original amount is ‘yes’, the interviewer increases the amount in steps until the answer is ‘no’; if the original answer is ‘no’, the interviewer reduces the amount until the answer becomes ‘yes’.

Individual WTP is the amount that a person will pay for himself. Household WTP is the sum that the head is willing to pay for the whole household. Researchers repeated the same test at 400 households after four to five weeks. Test and re-test data are available for 1 108 people and 348 households. These show that:

• the average WTP found by both methods is about 25 per cent lower in the re-test than the test
• the difference is larger for males, rural residents and household members other than the head, and after longer intervals between test and re-test
• the gap is greater for the ‘take it or leave it’ method than for the bidding game
• the difference is small for individual WTP but more pronounced for household WTP.

The differences between test and re-test results may be due to seasonal reductions in household food stocks, which are more pronounced in rural areas. This shows that willingness-to-pay is limited by ability-to-pay. If the interval between test and re-test is too long, such external events can greatly influence responses at the second interview. But if it is too short, respondents may remember and simply repeat their answers from the first interview.

The researchers conclude that the ‘take it or leave it’ method is simpler than the bidding game as a person makes a judgment about one given price. It is especially useful for postal questionnaires or telephone interviews. But face-to-face interviews are more practical here, where people have limited education and literacy and poor telephone access. The bidding game then becomes feasible. It will capture the highest price consumers are willing to pay, especially in Burkina Faso where people are used to bargaining and fixed-price markets are rare.

Source(s):
‘A comparison of the reliability of the take-it-or-leav-it and the bidding game approaches to estimating willingness-to-pay in a rural population in West Africa’, Social Science and Medicine 56: 2181-2189, by H. Dong, B. Kouyate, J. Cairns and R. Sauerborn, 2003
HINARI subscribers can access the full-text article here. Full document.

Funded by: Germany Research Foundation, Scottish Executive Health Department

id21 Research Highlight: 20 August 2003

Further Information:
Hengjin Dong
Department of Tropical Hygiene and Public Health
University of Heidelberg
Im Neuenheimer Feld 324
D-69120 Heidelberg
Germany

Fax: +49 6221 565948
Contact the contributor: donghengjin@yahoo.com

University of Aberdeen, Scotland

University of Heidelberg, Germany

Nouna Health Research Centre, Ministry of Health, Burkina Faso

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