Experimental design and the estimation of willingness to pay in choice experiments for health policy evaluation

This chapter focuses on stated preferences obtained from discrete choice experiments (DCEs also known as SPDCEs). as opposed to data that reflect real market choices (revealed preferences (RP) as discussed in Chapter 9). DCEs try to simulate the essential elemen1s of real market options that consumers might tace in the future. Unlike real market cholee datal DeEs rely on constructed markets in which key factors that arc hypothesized to drive choices arc systematically varied. 1'0 the extent that the consumers in a DCE make chokes in a manner consistent with the way in which they would ael uaUy choose in a real market, onc can derive standard welfare estimates for policy changes. The remainder of this cbapter is devoted to discussing and illustrating how this can be accomplished with DeBs, More details on DCEs can be found in Louviere, Hemher, anJ Swait (l)