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Diminishing Willingness to Pay per Quality-Adjusted Life Year: Valuing Acute Foodborne Illness

Authors

  • Kevin Haninger,

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    • AAAS Science & Technology Policy Fellow, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., NW, Washington, DC 20460, USA.

    • Harvard University (Center for Risk Analysis), 718 Huntington Ave., Boston, MA 02115, USA.

  • James K. Hammitt

    Corresponding author
      James K. Hammitt, Harvard University (Center for Risk Analysis), 718 Huntington Ave., Boston, MA 02115, USA; tel: 617-432-4343; fax: 617-432-0190; jkh@harvard.edu.
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    • Harvard University (Center for Risk Analysis), 718 Huntington Ave., Boston, MA 02115, USA.

    • Toulouse School of Economics (LERNA-INRA), 21 allée de Brienne, 31000 Toulouse, France.


James K. Hammitt, Harvard University (Center for Risk Analysis), 718 Huntington Ave., Boston, MA 02115, USA; tel: 617-432-4343; fax: 617-432-0190; jkh@harvard.edu.

Abstract

We design and conduct a stated-preference survey to estimate willingness to pay (WTP) to reduce foodborne risk of acute illness and to test whether WTP is proportional to the corresponding gain in expected quality-adjusted life years (QALYs). If QALYs measure utility for health, then economic theory requires WTP to be nearly proportional to changes in both health quality and duration of illness and WTP could be estimated by multiplying the expected change in QALYs by an appropriate monetary value. WTP is elicited using double-bounded, dichotomous-choice questions in which respondents (randomly selected from the U.S. general adult population, n = 2,858) decide whether to purchase a more expensive food to reduce the risk of foodborne illness. Health risks vary by baseline probability of illness, reduction in probability, duration and severity of illness, and conditional probability of mortality. The expected gain in QALYs is calculated using respondent-assessed decrements in health-related quality of life if ill combined with the duration of illness and reduction in probability specified in the survey. We find sharply diminishing marginal WTP for severity and duration of illness prevented. Our results suggest that individuals do not have a constant rate of WTP per QALY, which implies that WTP cannot be accurately estimated by multiplying the change in QALYs by an appropriate monetary value.

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