MR Microinsurance_2012_03_29.indd - International Labour ...

Willingness to pay for health microinsurance
A variation of the DC technique is “dichotomous choice with follow-up
question”. In the fi rst step, respondents state whether they are willing to pay a
specifi ed amount; in the second step, those who said “yes” get a higher bid and
those who said “no” a lower bid. According to Asfaw and Braun (2005), the problems
with the starting point bias can be partially toned down by the presence of
the second bid.
Another variant of the DC is the “take it or leave it” approach (TIOLI),
in which each respondent is asked one question during surveys of large
numbers of persons. Th e data are then analysed using econometric techniques
to identify the shape of the distribution. Th e diffi culties with this approach
are in identifying the relevant range of sample bids needed for precise estimation.
Another similar method is called the “payment card” (PC). Each subject is
invited to select his or her maximum WTP from the same specifi ed list of possible
values, which provides the respondent with a clear context for making the
valuation. Th e PC method achieved a higher completion rate and generated
higher valuations than the open-ended format. It is not exposed to starting-point
bias (like the bidding game) or to “yes-saying” (as with dichotomous choice) but
the potential bias when using the PC method is “mid-point bias”: respondents
tend to state their maximum WTP in the middle of the card. According to
Bayoumi (2004), using the PC method with a follow-up bidding process can
defi ne the value more precisely.
Table 7.1 Advantages and disadvantages of diff erent elicitation methods
Elicitation format Pros Cons
Open-ended formats (OE) simple and easy method
Closed-end formats formats
– diffi cult to answer
– low response rate
– results are sensitive to outliers
– compliance bias
Bidding game (BG) – easy and simple to answer
– easy for people who are used to bidding
for their daily utility goods
– starting-point bias
Dichotomous choice (DC) – simple and easy method; the respondent – results in higher WTP estimates com- com- com-
only has to make one or two choices pared to OE and PC
– starting point bias
– yes-saying bias
TIOLI – simple method; the respondent only has
to make one choice
– yes-saying bias
Payment card (PC) (PC) – comprehensible context for making the – range bias
valuation
– anchor-point bias
– can be self-administered
– mid-point bias
– amenable to data collection
– hypothetical bias
(unsupervised or postal questionnaire) – warm glow eff ect/social desirability bias
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