Demand for health care in Denmark: results of a national sample survey using contingent valuation

In this paper we use willingness to pay (WTP) to elicit values for private insurance covering treatment for four different health problems. By way of obtaining these values, we test the viability of the contingent valuation method (CVM) and econometric techniques, respectively, as means of eliciting and analysing values from the general public. WTP responses from a Danish national sample survey, which was designed in accordance with existing guidelines, are analysed in terms of consistency and validity checks. Large numbers of zero responses are common in WTP studies, and are found here; therefore, the Heckman selectivity model and log-transformed OLS are employed. The selectivity model is rejected, but test results indicate that the lognormal model yields efficient and unbiased estimates. The results give confidence in the WTP estimates obtained and, more generally, in CVM as a means of valuing publicly provided goods and in econometrics as a tool for analysing WTP results containing many zero responses.