Measuring the Difference in Mean WTP: Ordering Effects When CV Responses Are Not Independent

Yong-Chie Park

Dichotomous choice contingent valuation surveys frequently elicit multiple values in a single questionnaire. There are methodological issues that need to be resolved before the potential of willingness-to-pay can be fully exploited as a tools for the economic evaluation of health care programs. Of particular methodological interest are the consequences of varying tie order which willingness-to-pay questions are presented to respondents in contingent valuation studies. This paper examines the possibility of ordering effects in willingness-to-pay studies in health care. That is, when asking willingness-to-pay questions about three health care programs within a singe survey, the order the program are presented have an impact on the reported willingness-to-pay. Ordering effects are observed in the ranking of the programs, when using data from three separate dichotomous choice contingent valuation studies. The results suggest that the best explanation for the ordering effects is one or the mixture of the additional goods, fading glow, starting point bias, response set.

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