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Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (1)

✍ Scribed by Mandy Ryan

Publisher: John Wiley and Sons
Year: 2004
Tongue: English
Weight: 87 KB
Volume: 13
Category: Article
ISSN: 1057-9230
DOI: 10.1002/hec.869

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✦ Synopsis

Abstract

Lancsar and Savage argue that current methods of deriving welfare estimates, using discrete choice experiments, are inconsistent with random utility and welfare theory. In this paper I show that this not the case. The general formula proposed by Small and Rosen for estimating welfare, which Lancsar and Savage claim should be used, reduces to the method used by health economists for state of the world models. The important question then becomes when are state of the world models, as opposed to multiple alternative models, appropriate? Copyright © 2004 John Wiley & Sons, Ltd.

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