This article proposes contemporary best-practice recommendations for stated preference (SP) studies used to inform decision making, grounded in the accumulated body of peer-reviewed literature. These recommendations consider the use of SP methods to estimate both use and non-use (passive-use) values, and cover the broad SP domain, including contingent valuation and discrete choice experiments. We focus on applications to public goods in the context of the environment and human health but also consider ways in which the proposed recommendations might apply to other common areas of application. The recommendations recognize that SP results may be used and reused (benefit transfers) by governmental agencies and nongovernmental organizations, and that all such applications must be considered. The intended result is a set of guidelines for SP studies that is more comprehensive than that of the original National Oceanic and Atmospheric Administration (NOAA) Blue Ribbon Panel on contingent valuation, is more germane to contemporary applications, and reflects the two decades of research since that time. We also distinguish between practices for which accumulated research is sufficient to support recommendations and those for which greater uncertainty remains. The goal of this article is to raise the quality of SP studies used to support decision making and promote research that will further enhance the practice of these studies worldwide.

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Contemporary Guidance for Stated Preference Studies

Individuals are widely believed to overstate their economic valuation of a good by a factor of two or three. This paper reports the results of a meta-analysis of hypothetical bias in 28 stated preference valuation studies that report monetary willingness-to-pay and used the same mechanism for eliciting both hypothetical and actual values. The papers generated 83 observations with a median ratio of hypothetical to actual value of only 1.35, and the distribution has severe positive skewness. We find that a choice-based elicitation mechanism is important in reducing bias. We provide some evidence that the use of student subjects may be a source of bias, but since this variable is highly correlated with group experimental settings, firm conclusions cannot be drawn. There is some weak evidence that bias increases when public goods are being valued, and that some calibration methods may be effective at reducing bias. However, results are quite sensitive to model specification, which will remain a problem until a comprehensive theory of hypothetical bias is developed.

/pdf/a-meta-analysis-of-hypothetical-bias-in-stated-preference-18d4o5dai1.pdf

A meta-analysis of hypothetical bias in stated preference valuation

Individuals are widely believed to overstate their economic valuation of a good by a factor of two or three. This paper reports the results of a meta-analysis of hypothetical bias in 28 stated preference valuation studies that report monetary willingness-to-pay and that used the same mechanism for eliciting both hypothetical and actual values. The papers generated 83 observations with a median value of the ratio of hypothetical to actual value of 1.35, and the distribution has severe positive skewness. Since a comprehensive theory of hypothetical bias has not been developed, we use a set of explanatory variables based on issues that have been investigated in previous research. We find that a choice-based elicitation mechanism is important in reducing bias, though an insufficient number of studies and confounding with other variables prevents us from characterizing individual mechanisms. We provide some evidence that the use of student subjects may be a source of bias, but this variable is highly correlated with group experimental settings and no firm conclusions can be drawn. There is some weak evidence that bias increases when public goods are being valued, and that some calibration methods are effective at reducing bias. Results are quite sensitive to model specification, which will remain a problem until a comprehensive theory of hypothetical bias is developed.

/pdf/a-meta-analysis-of-hypothetical-bias-in-stated-preference-2svmqis7h8.pdf

A Meta-Analysis of Hypothetical Bias in Stated Preference Valuation

Health-related quality of life (HRQoL) measured on population level may be useful to guide policies for health. This study aims to describe the HRQoL; in EQ-5D dimensions, mean rating scale (RS) scores and mean EQ-5D index values, in the general population, by certain disease and socio-economic groups, in Stockholm County 1998. The EQ-5D self-classifier and a RS were included in the 1998 cross-sectional postal Stockholm County public health survey to a representative sample (n = 4950, 20-88 years), 63% response rate. Mean RS score ranged from 0.90 (20-29 years) to 0.69 (80-88 years), mean EQ-5D index value ranged from 0.89 (20-29 years) to 0.74 (80-88 years). For different diseases mean RS scores ranged from 0.80 (asthma) to 0.69 (angina pectoris), mean EQ-5D index values ranged from 0.79 (asthma) to 0.66 (low back pain). The mean health state scores (RS and EQ-5D index) were 0.06 lower in the unskilled manual group than in the higher non-manual group after controlling for age and sex (p < 0.0001). This difference was 0.03 after controlling also for different diseases (p < 0.0001). In conclusion, our results show that the HRQoL varies greatly between socio-economic and disease groups. Furthermore, after controlling for age, sex and disease, HRQoL is lower in manual than in non-manual groups.

Swedish population health-related quality of life results using the EQ-5D.

Background Limited resources coupled with unlimited demand for healthcare mean that decisions have to be made regarding the allocation of scarce resources across competing interventions. Policy documents have advocated the importance of public views as one such criterion. In principle, the elicitation of public values represents a big step forward. However, for the exercise to be worthwhile, useful information must be obtained that is scientifically defensible, whilst decision-makers must be able and willing to use it. Aims and objectives The aim was to identify techniques that could be reasonably used to elicit public views on the provision of healthcare. Hence, the objectives were: (1) to identify research methods with the potential to take account of public views on the delivery of healthcare; (2) to identify criteria for assessing these methods; (3) to assess the methods identified according to the predefined criteria; (4) to assess the importance of public views vis-a-vis other criteria for setting priorities, as judged by a sample of decision-makers; (5) to make recommendations regarding the use of methods and future research. Methods A systematic literature review was carried out to identify methods for eliciting public views. Criteria currently used to evaluate such methods were identified. The methods identified were then evaluated according to predefined criteria. A questionnaire-based survey assessed the relative importance of public views vis-a-vis five other criteria for setting priorities: potential health gain; evidence of clinical effectiveness; budgetary impact; equity of access and health status inequalities; and quality of service. Two techniques were used: choice-based conjoint analysis and allocation of points technique. The questionnaire was sent to 143 participants. A subsample was followed up with a telephone interview. Results The methods identified were classified as quantitative or qualitative. RESULTS - QUANTITATIVE TECHNIQUES: Quantitative techniques, classified as ranking, rating or choice-based approaches, were evaluated according to eight criteria: validity; reproducibility; internal consistency; acceptability to respondents; cost (financial and administrative); theoretical basis; whether the technique offered a constrained choice; and whether the technique provided a strength of preference measure. Regarding ranking exercises, simple ranking exercises have proved popular, but their results are of limited use. The qualitative discriminant process has not been used to date in healthcare, but may be useful. Conjoint analysis ranking exercises did well against the above criteria. A number of rating scales were identified. The visual analogue scale has proved popular within the quality-adjusted life-year paradigm, but lacks constrained choice and may not measure strength of preference. However, conjoint analysis rating scales performed well. Methods identified for eliciting attitudes include Likert scales, the semantic differential technique, and the Guttman scale. These methods provide useful information, but do not consider strength of preference or the importance of different components within a total score. Satisfaction surveys have been frequently used to elicit public opinion. Researchers should ensure that they construct sensitive techniques, despite their limited use, or else use generic techniques where validity has already been established. Service quality (SERVQUAL) appears to be a potentially useful technique and its application should be researched. Three choice-based techniques with a limited application in healthcare are measure of value, the analytical hierarchical process and the allocation of points technique, while those more widely used, and which did well against the predefined criteria, include standard gamble, time trade-off, discrete choice conjoint analysis and willingness to pay. Little methodological work is currently available on the person trade-off. RESULTS - QUALITATIVE TECHNIQUES: Qualitative techniques were classified as either individual or group-based approaches. Individual approaches included one-to-one interviews, dyadic interviews, case study analyses, the Delphi technique and complaints procedures. Group-based methods included focus groups, concept mapping, citizens' juries, consensus panels, public meetings and nominal group techniques. Six assessment criteria were identified: validity; reliability; generalisability; objectivity; acceptability to respondents; and cost. Whilst all the methods have distinct strengths and weaknesses, there is a lot of ambiguity in the literature. Whether to use individual or group methods depends on the specific topic being discussed and the people being asked, but for both it is crucial that the interviewer/moderator remains as objective as possible. The most popular and widely used such methods were one-to-one interviews and focus groups. (ABSTRACT TRUNCATED)

Eliciting public preferences for healthcare: a systematic review of techniques.

Concern exists that hypothetical willingness to pay questions overestimate real willingness to pay In a field experiment, we compare two methods of removing hypothetical bias, a cheap talk approach and a certainty approach, with real purchases We find evidence of hypothetical bias for unadulterated contingent valuation Contingent valuation with certainty statements removes the hypothetical bias, but the cheap talk approach has no significant impact Our findings suggest that willingness to pay can be accurately estimated by adding a simple follow-up question about the certainty of responses and that cheap talk is not a generally effective approach Information about the willingness to pay for non-market goods is crucial for understanding the welfare implications of different policies Ideally we would like to rely on actual choices for inferring willingness to pay But for many public programmes, especially those in the environmental and health area, revealed preference information is limited This limitation can arise from the lack of markets or third-party financing Researchers have therefore tried to estimate willingness to pay based on stated preferences that are hypothetical choices This methodology, known as contingent valuation, typically involves a survey or experiment in which there is a detailed description of the good being offered, a description of how the good would be provided, a method for eliciting preferences for the good, follow up debriefing questions and questions about socioeconomic characteristics (Portney, 1994; Carson, 2001) Contingent valuation is still somewhat controversial in economics (Diamond and Hausman, 1994; Carson et al,

Eliciting willingness to pay without bias: evidence from a field experiment*

Use of the contingent valuation method is controversial among economists because it is based on hypothetical rather than real choices. Previous experiments have suggested that the commonly used dichotomous choice contingent valuation method leads to hypothetical bias, i.e., overestimates the real willingness to pay. We carried out an experiment to compare the dichotomous choice contingent valuation method with real purchase decisions for a consumer good. We confirm previous findings that hypothetical yes responses overestimate real purchase decisions, but we cannot reject the null hypothesis that definitely sure yes responses correspond to real purchase decisions.

Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation

http://directory.umm.ac.id/Data%20Elmu/jurnal/J-g/Journal%20of%20Health%20Economics/Vol20.Issue3.May2001/720.pdf

Hypothetical versus real willingness to pay in the health care sector: results from a field experiment.

Experimental data comparing hypothetical and real dichotomous choice responses for two different goods were used to estimate a statistical bias function to calibrate the hypothetical yes responses. The probability that a hypothetical yes response would be a real yes response was estimated as a function of . the individual's self-assessed certainty of the hypothetical yes response assessed on a 0)10 scale and a variable representing the price level. Without calibration the hypothetical yes responses significantly exceeded the proportion of real yes responses, but after calibration the null hypothesis of no difference between hypothetical and real responses could not be rejected in any of the experiments.

Calibrating Hypothetical Willingness to Pay Responses

https://onlinelibrary.wiley.com/doi/pdf/10.1046/j.1524-4733.2001.40202-36.x

Karen Blumenschein

Papers

Eliciting willingness to pay without bias: evidence from a field experiment*

Experimental Results on Expressed Certainty and Hypothetical Bias in Contingent Valuation

Hypothetical versus real willingness to pay in the health care sector: results from a field experiment.

Calibrating Hypothetical Willingness to Pay Responses

Par13: hypothetical versus real willingness to pay in the health care sector: results from a field experiment