Average willingness to pay for disease prevention with personalized health information
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Personal health related information modifies individuals’ willingness to pay for disease prevention programs inasmuch as it allows health status assessment based on intrinsic (instead of average) characteristics. In this paper, we examine the effect that personalized information about the baseline probability of disease has on the average willingness to pay for programs reducing either the probability of disease (self-protection) or the severity of disease (self-insurance). We show that such information raises the average willingness to pay for self-protection while it increases the average willingness to pay for self-insurance if health and wealth are complements (i.e. the marginal utility of wealth rises with health).
KeywordsPersonalized health information Willingness to pay Disease prevention Self-protection Self-insurance
JEL ClassificationD81 I18
We thank seminar participants at the Paris Ouest Nanterre La Défense University, at the JESF meeting in Créteil, at the Ludwig Maximilian University of Munich, at the EGRIE meeting in St Gallen, at the IHEA/ECHE Congress in Dublin, at the University of Dijon and at EM Lyon Business School for constructive comments on earlier versions of the paper. We also thank Christian Gollier and an anonymous referee for helpful suggestions.
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