Stated preferences for the removal of physical pain resulting from permanently disabling occupational injuries

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Stated preferences for the removal of physical pain resulting from permanently disabling occupational injuries

A contingent valuation study of Taiwan

Ho, Jiune-Jye / Liu, Jin-Tan / Wang, Jung-Der

AbstractWithin the process of calculating the true costs of illness, physical pain is a component of intangible, or human, costs. One method of estimating the monetary value of such costs is the ‘contingent valuation method’ (CVM), a stated preference method based upon the elicitation of levels of willingness to pay (WTP) facilitated through surveys. This study is amongst the first of its kind to apply CVM to the estimation of the cost of the removal of physical pain resulting from permanently disabling occupational injuries. We assume that a painkilling drug has been invented to mitigate physical pain with the advantages of validity and instantaneity, and without any side effects. The WTP of each of the respondents is determined by a two-step sequential-bidding process. The maximum WTP under log normal distribution was NT $1791/day (US $65.1), whilst under Weibull distribution it was NT $1913/day (US $69.6). Older respondents, those with higher household income, fall injuries, longer periods of hospitalization, or with a perceived demand for the painkilling drug in excess of one day, displayed a positive independent effect on the eliciting of their WTP. In addition, respondents with higher ‘out-of-pocket’ expenses, or where the interview took place 2 years or more after the injury occurred, responded with a lower WTP.