Working Paper

Morbidity Valuation with a Cessation Lag: Choice Experiments for Public- and Private-Goods Contexts in Japan

Jul 9, 2007 | Kenshi Itaoka, Alan J. Krupnick, Ava Saito, Makoto Akai


We conducted a choice experiment presenting respondents with risk reductions for three types of illnesses related to air pollution—pollen allergy, chronic bronchitis, and lung cancer—splitting the sample to test the effects of private-good and public-good contexts on the value of a statistical case (VSC) of each illness type. The results indicate that pollen allergy would be valued less than chronic bronchitis, which would be valued less than lung cancer. In terms of the private/public goods context, when exogenous rates of time preference/discount rates were applied to the estimation procedure, the VSC for a specific illness almost always was larger for the public-goods context. However, because estimated rates of time preference are far larger in the private-goods context (17% versus 1.3%), the benefits are lower, and, as they are the denominator in the VSC calculation, the VSCs are larger. We also find some effects that could be attributed to paternalistic altruism on the rate of time preference, as well as on willingness to pay for illness risk reduction. For instance, respondents with children were willing to pay more for pollen allergy risk reduction than respondents without children but less for lung cancer in the public-goods context.