Willingness to Pay in Health
Willingness to pay (WTP) is an economic valuation method that elicits what individuals or society are willing to spend for a health benefit or to avoid a health risk. Rooted in contingent valuation (Carson & Louviere, 1980s), WTP is used to monetize health outcomes for cost-benefit analysis and to infer implicit cost-effectiveness thresholds from actual healthcare spending patterns. Unlike revealed preference (observing actual spending behavior), WTP uses stated preferences—surveys asking respondents: 'How much would you pay for this health improvement?'
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- Carson, R. T., & Louviere, J. J. (2011). A Common Nomenclature for Stated Choice Studies. In S. Hess & A. Daly (Eds.), Choice Modelling: The State of the Art and the State of Practice. Cheltenham: Edward Elgar. · URL
- Grosse, S. D. (2008). Assessing Cost-Effectiveness in Healthcare: History of the $50,000-per-Life-Year Benchmark. Health Care Management Science, 11(2), 176-182. · URL
- Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the Economic Evaluation of Health Care Programmes (4th ed.). Oxford: Oxford University Press. · URL
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