Dealing with internal inconsistency in double-bounded dichotomous choice: an application to community-based health insurance

• Published in: Empirical economics Vol. 46; no. 1; pp. 317 - 328
• Main Authors: Donfouet, Hermann Pythagore Pierre, Jeanty, P. Wilner, Mahieu, P.-A.
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.02.2014; Springer Nature B.V; Springer Verlag
• Subjects: Calibration; Decision making; Econometrics; Economic models; Economic statistics; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Finance; Health economics; Health insurance; Humanities and Social Sciences; Insurance; Management; Polls & surveys; Statistics for Business; Studies; Valuation; Valuation methods; Willingness to pay; D6; Internal inconsistency; C15; Double certainty calibration; Community-based health insurance; Contingent valuation; I38; community-based health insurance; double certainty calibration; internal inconsistency
• ISSN: 0377-7332; 1435-8921
• DOI: 10.1007/s00181-012-0665-2

Contingent valuation method is commonly used in the field of health economics in an attempt to help policy makers in their policy-making decision process. The use of the double-bounded dichotomous choice format results in a substantial gain in statistical efficiency over the single-bounded dichotomous choice format. Yet, there is internal inconsistency with a downward mean shifting in the second responses. Using data from a community-based health insurance survey, this paper aims at testing whether double certainty calibration reduces internal inconsistency in a double-bounded dichotomous choice contingent valuation survey. Results suggest that double calibration significantly reduces internal inconsistency while maintaining the efficiency gain arising from the double-bounded format.