Willingness to pay for customized health insurance package: An exploratory study in a developing country

Abstract

The study explores the determinants, that influence the willingness to pay for customized health insurance package, in the context of a developing country. The targeted respondents were drawn from both urban and rural areas of Amritsar, Jalandhar, Kapurthala, Ludhiana, Mohali, and Patiala Districts of Punjab State, India. A pre-tested questionnaire was administered to 1254 low-income households, selected by stratified random sampling technique. The contingent valuation method was applied to elicit willingness to pay (WTP), using the reverse bidding format. Descriptive statistics for demographic details of the respondents and multiple regression method (backward), was used to explore the influence of socio-economic determinants on willingness to pay. Overall, the average willingness to pay for a customized package was Rs 888.56 per year ($50.11). The regression results revealed that higher the education profile, higher the willingness to pay and more the number of dependents and sick members in the family, higher the willingness to pay.