Abstract
An important area of inquiry for economists is understanding individuals’ willingness to sacrifice current consumption of goods and services for a change in some non-market good (e.g., improvement in the environment or health), and especially how results may vary across diverse subgroups and populations. This study explores racial and ethnic disparities in willingness to pay (WTP) for improved health among an aging population sample, while also examining the impact of health status and risky health behaviors. Using contingent valuation survey data from the Health and Retirement Study (HRS) and a Heckman two-step modeling technique to correct for selection effects, findings reveal racial and ethnic disparities in absolute mean WTP but not relative mean WTP. Although minorities are more likely to have a positive WTP, they are not willing to pay increasing absolute dollar amounts for improved health. However, when compared with non-Hispanic Whites, minorities’ annual mean WTP is an higher percentage of their annual household income. In addition, while risky health behaviors do not affect WTP valuations, current morbidity affects whether or not an individual will have a positive WTP for improved health.
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