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"Institutionalization aversion” and the willingness to pay for home health care

Costa-i-Font, Joan (2017) "Institutionalization aversion” and the willingness to pay for home health care. Journal of Housing Economics, 38. pp. 62-69. ISSN 1051-1377

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Identification Number: 10.1016/j.jhe.2017.10.001

Abstract

We examine the presence of a systematic preference for independent living at old age which we refer as “institutionalization aversion” (IA). Given that IA is not observable from revealed preferences, we draw on a survey experiment to elicit individuals’ willingness to pay (WTP) to avoid institutionalization (e.g., in a nursing home), using a double-bounded referendum WTP format. Our results suggest robust evidence of IA and reveal a willingness to pay of up to 16% of respondent’s (individuals over fifty-five years of age) average income. We find that estimates of the willingness to pay to avoid institutionalization (or €292 at the time of the study) exceed the amount respondents are willing to pay for home health care at old age in the event of a mild impairment (€222). WTP estimates vary with income, age and especially, respondents’ housing conditions. Finally, we test the sensitivity of our estimates to anchoring effects and ‘yea-saying’ biases.

Item Type: Article
Official URL: https://www.journals.elsevier.com/journal-of-housi...
Additional Information: © 2017 Elsevier © CC BY-NC-ND
Divisions: Social Policy
Subjects: H Social Sciences > HV Social pathology. Social and public welfare. Criminology
R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Sets: Departments > Social Policy
Date Deposited: 13 Oct 2017 12:03
Last Modified: 20 Jan 2020 06:37
URI: http://eprints.lse.ac.uk/id/eprint/84647

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