TAXPAYER WILLINGNESS TO PAY FOR HEALTH INSURANCE REFORM: A CONTINGENT VALUATION ANALYSIS

A key criterion for evaluating policies to expand health insurance coverage is weighing the costs of such policies against the willingness of the public to pay for coverage expansions. We use new panel survey data from New York State to estimate residents' willingness to pay (WTP) to expand public insurance coverage. Using a nonparametric double‐bounded contingent valuation (CV) approach, we specifically ask residents about their WTP to reduce the rate of uninsurance in the state. Our results imply an aggregate lower‐bound WTP of over $2,800 per year to cover one person. We also analyze heterogeneity in WTP by sub‐group and changes in individual WTP over time between 2008 and 2010. We find that a large majority of residents are willing to pay additional taxes to reduce the number of uninsured in the state, and that average WTP remained remarkably stable despite the economic downturn and the politically polarized discussions surrounding the Affordable Care Act. Decomposing the changes in individual WTP, we find that economic factors related to the recession, including changes in income and employment status, cannot explain changes in individual WTP, whereas individual changes in political opinions about health insurance reform between 2008 and 2010 are strongly correlated with changes in WTP. (JEL H20, H42, H51, H75, I13)     

Demand for decision autonomy and the desire to avoid responsibility in risky environments: Experimental evidence

This paper experimentally studies individuals’ willingness to pay for the authority to make risky decisions for themselves, and the willingness to take responsibility for others, as primary determinants of leadership willingness. We consider a setup involving a pair of individuals, where one individual is designated to make both parties’ decisions by default. Depending on treatment, either party can express a willingness to pay to change this situation. If one’s willingness to pay to make her own decision herself is positive (negative), we interpret it as a demand for autonomy (a desire to delegate). On the flip side, if one’s willingness to pay to avoid making a decision on behalf of another person is positive (negative), we interpret it as a desire to avoid responsibility (a demand for authority). We find that on average, individuals are willing to pay positive amounts of money to make their decisions themselves, and incur positive but smaller opportunity costs for the right to make decisions for others. Certain individual and contextual characteristics emerge as important predictors. Notably, (1) men are more likely to demand both autonomy and authority at the same time, (2) individuals with other regarding preferences are more likely to pay to avoid taking responsibility for others’ decisions when the probability of loss is high. Exploring differences between individuals’ own decisions and the decisions they make on behalf of others, we find that subjects with other-regarding preferences tend to “cautious-shift” when making decisions on behalf of others. Also, we find that individuals who would like to avoid responsibility also tend to “shift” their decisions when put in a decision-making role. The results have implications for the allocation of decision-making authority in pairs and leadership.     

The willingness to pay–willingness to accept gap revisited: The role of emotions and moral satisfaction

While many earlier studies have found that people’s maximum willingness to pay for having a good is often substantially lower than their minimum willingness to accept not having it, more recent experimental evidence suggests that this discrepancy vanishes for standard consumption goods when an incentive-compatible design without misconceptions is used. This paper hypothesises that there is nevertheless a discrepancy for goods with a perceived moral character, such as contributions to a good cause, and moreover that the reason for this discrepancy can largely be explained by differences in emotions and moral perceptions. The results from a real-money dichotomous-choice experiment, combined with measurements of emotions and morality, are consistent with these hypotheses.     

Tax morale and fairness in conflict an experiment

Most people pay their taxes most of the time, even if the expected disutility from enforcement is too low to deter tax evasion. One potential reason is tax morale and, more specifically, rule following. In a lab experiment, we show that the willingness to pay taxes just because participants are told they are supposed to pay is indeed pronounced. Yet compliance is reduced if participants learn that income is heterogeneous. The effect is driven by participants with the lowest income. The reduction obtains irrespective of the tax regime. If the tax is proportional to income, or progressive, participants become more skeptical about the willingness of participants with high income to comply.     

RELIABILITY OF STATED PREFERENCES FOR CHOLERA AND TYPHOID VACCINES WITH TIME TO THINK IN HUE,VIETNAM

We examine the effect of giving respondents time to think about their stated choices (SC) in a survey of cholera and typhoid vaccine preferences in Hue, Vietnam. Because neither vaccine is widely available in Vietnam, we used the SC approach (a stated preference technique) and gave half of our respondents overnight to think about their choices to make the hypothetical valuation scenario as similar to a real‐life choice situation as possible. Respondents who were given extra time made fewer choices that violated internal validity tests of utility theory, and had lower average willingness to pay (WTP), confirming a result found in similar studies in the contingent valuation literature. (JEL D12, I18, C25)     

A DYNAMIC EXPLANATION OF THE WILLINGNESS TO PAY AND WILLINGNESS TO ACCEPT DISPARITY

Recent evidence from laboratory experiments suggests that important disparities exist between willingness to pay (WTP) and compensation demanded for the same good. Because a fundamental postulate in neoclassical theory is that with small income effects and many available substitutes, the willingness to accept (WTA) and WTP measures of value for a commodity should be roughly equivalent, this finding has vast implications in both a positive and normative sense. This study advances, and experimentally tests, a new explanation of the WTP/WTA disparity—a dynamic theory based on the presence of commitment costs. Although to date neoclassical models have not explained the observed data patterns well, we find that the commitment cost theory combined with a simple behavioral anomaly is able to lend insights into the causes and severity of the WTA/WTP disparity. Furthermore, we find that market experience attenuates the behavioral anomaly, consistent with the notion that no value disparity exists for agents with sufficient market experience. (JEL Q21, Q26)     

ELECTRIC AND PLUG‐IN HYBRID VEHICLE DEMAND: LESSONS FOR AN EMERGING MARKET

Understanding demand in the new plug‐in hybrid electric vehicle (PHEV) market is critical to designing more effective adoption policies. We use stated preference data from an innovative choice experiment to estimate demand for PHEVs relative to battery electric vehicles (BEVs) and to explore heterogeneity in demand for these vehicles. We find the gap between willingness to pay for PHEVs and their price premium over conventional vehicles is on the order of current subsidies, while that of BEVs is an order of magnitude larger. We use a latent class model to show PHEVs draw a different consumer segment into the market. (JEL Q5, R41)     

Valuing housework time from willingness to spend time and money for environmental quality improvements

We develop a new approach to assessing the value of home production time based on willingness to spend time and money to obtain environmental improvements. When peoples’ choice is constrained by time as well as money, measures of willingness to pay can be defined with respect to either numeraire. In a model that explicitly allows for multiple shadow values of time, we show that the willingness to pay time and money measures are linked through the value of saving time. With survey information on peoples’ willingness to spend additional time on housework activities, as well as pay money, to obtain environmental quality improvements, joint estimation within a utility-consistent structure produces estimates of both willingness to pay and the value of saving housework time. From the value of saving housework time, the marginal value of housework time can be readily identified. When applied to Korean households’ valuation of water quality improvements in the Man Kyoung River, we find that the value of housework time is 70–80% of the market wage.

Migration Decisions Within Dual‐Earner Partnerships: A Test of Bargaining Theory

This article focuses on the problems faced by dual‐earner partnerships arising from the regional coordination of the partners' careers. It is still unknown whether the fact that couples are less mobile than singles is caused by homogeneous preferences within couples or by a process of balancing conflicting interests. Consequently, we analyze the potential conflicts provoked by work‐related migration incentives. We test hypotheses derived from bargaining theory using quasi‐experimental data from a factorial survey of nearly 280 European couples. Our results support the bargaining approach and confirm that asymmetrical shifts in bargaining power drive the potential for conflict. Women's willingness to move is generally less than men's, but the impact of employment prospects differs only slightly by gender.     

Do taboo trade-offs explain the difficulty in valuing health and social interventions?

Persistent anomalies in the results of willingness to pay studies, despite improvements in measurement technique, challenge the assumption in economics that all sources of value are commensurable. Two sources of incommensurability have been identified: interdimensional incommensurability, which refers to the cognitive difficulty that people encounter when trying to assign a monetary value to health; and constitutive incommensurability, which arises when some forms of trade-off are regarded as ‘taboo’. In this paper we explore whether the notion of taboo trade-offs might explain some of the difficulties experienced in health-related willingness to pay studies.     

Does Institutional Trust Increase Willingness to Pay More Taxes to Support the Welfare State?

We evaluate the effect of institutional trust on the willingness to pay more taxes to support the welfare state. We found a positive effect of institutional trust on the willingness to pay more taxes to support the welfare state irrespective of the empirical approach used. Our instrumental variable analysis shows that causality run from institutional trust to welfare state support. A one-unit increase in institutional trust leads to a 15 percentage point increase in the willingness to pay more taxes to help the needy. Similarly, a one-unit increase in institutional trust leads to a 16 percentage point increase in the willingness to pay more taxes to support public health care and education. Consequently, institutional trust should be viewed as one of the most important mechanisms that protect the welfare state from dismantling and retrenchment. We also found a stronger effect of support for more universal programs such as public health care and education than for helping the needy.     

Can willingness to pay capture the value of altruism? An exploration of Sen’s notion of commitment

Amartya Sen’s distinction between sympathy and commitment is used to examine the assertion that willingness to pay (WTP) can capture the value of altruism in health care. Willingness to pay values for a vaccination program stated to benefit only one’s self in the first instance and only other people in the second instance were elicited from a small convenience sample. Qualitative methods were then used to explore the meaning of the responses. Commitment was found to be a motivating factor and drove a wedge between willingness to pay and valuation of the program. The consequences of this for health economic research are discussed.     

Church organists: Analysing their willingness to play

There currently exists a scarcity of church organ players even though they have traditionally been paid. This paper presents an empirical investigation into the factors that affect the church organ player's willingness to play. Results suggest pay does not attract the organ player to the position but being paid in situ increases their willingness to play, as do larger choir sizes and a better instrument quality. We also identify that organ players should be taught when they are young, as the younger the church organ player starts learning the instrument then the greater their willingness to play.     

TESTING COMMITMENT COST THEORY IN CHOICE EXPERIMENTS

In choice experiments, it is commonly assumed that individuals make choices in static and certainty decision‐making conditions. Real‐world choices, however, are usually made in a dynamic setting. Committing a purchase decision under conditions of uncertainty might have a “Commitment Cost” (CC). In this study, we test CC theory using a nonhypothetical choice experiment. Specifically, we test whether choice behavior and willingness to pay estimates differ when individuals have the option to gain present or delayed information or reverse the transaction. Our results suggest that the construction of a dynamic decision context can be relevant in the design of choice experiments. (JEL C90, C93, Q18)     

HOW THE SCOPE AND METHOD OF PUBLIC FUNDING AFFECT WILLINGNESS TO PAY FOR PUBLIC GOODS

This article examines the sensitivity of survey measures ofwillingness to pay for public goods. Visitors to a science museumin San Francisco were asked to provide estimates of their willingnessto pay for saving seabirds from oil spills and for teachingEnglish to immigrants under various experimental conditions.Willingness to pay was substantially reduced by a seeminglyinnocuous reminder about how many individuals would be affectedby a tax or would be asked to contribute to a given cause. Thisfinding, which cannot be explained by standard economic interpretationsof willingness to pay, is consistent with previous studies showingthat subtle changes in question order and wording can affectthe nature of the responses.     

SEX AND WILLINGNESS TO MOVE FOR OCCUPATIONAL ADVANCEMENT: SOME NATIONAL SAMPLE RESULTS

The comparative willingness of men and women to be geographically mobile for occupational advancement and the contributions of various factors to this relationship are explored using national survey-data. Variables identified by past theory and research as mediating the association between sex and willingness to move did explain a substantial amount of variance in willingness to relocate in the entire sample and subsamples of married respondents and respondents in dual-earner couples. However, in each case, sex continued to explain significant additional variance in willingness to move Reasons for this finding and implications for further research are explored.     

DUBIOUS AND DUBIOUSER: CONTINGENT VALUATION AND THE TIME OF DAY

We collect contingent valuation data from 524 student survey respondents over a 3‐day, 72‐hour period. Data analysis of a hypothetical campus referendum focuses on time‐of‐day effects on willingness to pay for a renewable energy project. We find that subjects responding to the survey during the night‐time hours (i.e., between 12 a.m. and 6 a.m.) do not display the law of demand, offering theoretically invalid responses to questions with important policy implications. Results from this research may have serious implications for the contingent valuation method (CVM). In short, just like your father said, nothing good happens after midnight when using the CVM. (JEL Q51)     

Anti-Discrimination vs. Anti-Poverty? A Comparison of Pay Equity and Living Wage Reforms

SUMMARY

Welfare reform focuses attention on the potential of pay equity and living wage strategies to move women out of the ranks of the working poor. In this study, we use data from a large municipality in the Northeast to simulate implementation of the two policies and compare their relative effectiveness in raising the earnings of female- and minority-dominated jobs, narrowing gender- and race-based earnings differentials, and lifting workers out of poverty. Results show that pay equity raises salaries across-the-board, but especially among low-skilled and minority-dominated jobs, and closes the wage gap. Both pay equity and living wage dramatically reduce the incidence of poverty; living wage, however, leaves virtually untouched the type of discrimination targeted by pay equity and has little impact on the wage gap. The implications of these results for addressing the needs of women transitioning off public assistance and wage justice are discussed. We conclude that both policies should be an integral part of welfare reform efforts, as well as key planks in an overall wage justice strategy.     

REPUTATION TRANSMISSION WITHOUT BENEFIT TO THE REPORTER: A BEHAVIORAL UNDERPINNING OF MARKETS IN EXPERIMENTAL FOCUS

Reputation is a commonly cited check on opportunism, but it is often unclear what motivates an agent to report another's behavior when it is easy for the aggrieved individual to move on. In a sharply focused laboratory experiment, we find that many cooperators pay to report a defecting partner without the possibility of pecuniary benefit when this has the potential to deprive the latter of future gains and to help his next partner. We illustrate how a social preference can explain such costly reporting, and also discuss evidence for a role of emotions. (JEL C91, D03, D63)     

Who is willing to come back? College students' willingness to seek help after using campus mental health services

Objective: To examine characteristics of college students who have previously received mental health (MH) services on campus and are willing to seek help again in the future. Participants: Spring 2015 ACHA-NCHA II (N = 12,501) undergraduate respondents who had previously used MH services on their current campus. Methods: Binary logistic regression with willingness to seek MH services in the future as the dependent variable. Results: Among students who had already utilized campus MH services, significant predictors for future help-seeking were: female, white, gay/lesbian, those not working for pay, having the college/university health insurance plan, and not currently/previously serving in the military (p < .05). Conclusions: The predictors for willingness to use services in the future were consistent with the existing literature related to initial use. Colleges and universities need to consider factors that influence openness to MH services after a previous experience in addition to initiating care. Implications for college MH professionals are provided.