Valuing health and air quality using stated preference methods

Abstract

<p>The objectives of this thesis were to examine the use of stated preference methods in the valuation of health and environmental attributes. The first objective was to investigate the current state of research of non-market valuation of health care interventions. The second objective was to examine the potential for using conjoint analysis to value the health and non-health benefits of environmental improvements. A case study was conducted in which conjoint analysis was employed in order to value the attributes of air quality changes in the Regional Municipality of Hamilton-Wentworth. The objectives of the case study were (i) to obtain accurate information about the willingness-to-pay and the health trade-offs of the attributes, and (ii) to gather evidence of the nature and effect of cognitive difficulties and to explore the use of ranking information. In the case study, a total of 1908 surveys were mailed out to households. Four attributes were employed--health effects, black fallout, bad odours, and poor visibility. A fifth attribute--property taxes--was used so that willingness-to-pay could be estimated. Three levels of each alternative were employed: The current situation, one-third better, and one-third worse. Respondents were asked to rank nine choice sets each consisting of four alternatives. Of the 515 surveys were returned, only 115 respondents completely ranked all of the choice sets without choosing a dominated alternative (a dominance violation). Hence, the task was cognitively difficult. Incorporating both first and second ranked choices increased the precision of the results. Conjoint analysis ranked data can provide useful estimates of the trade-offs between attributes of air quality. More research is necessary to evaluate the sources of cognitive difficulties so that policy makers can be more confident with the results. The results from a conjoint analysis study can provide a valuable starting point in any economic evaluation of public goods, particularly health and the environment.</p>