Abstract
We estimate the willingness to pay (WTP) of individuals to have increased spatial access to hospitals using a spatial hedonic price model. Employing a dataset of 6,093 observations at the census block group level, we find that the WTP of individuals to live one mile closer to a hospital is positive if the hospital is a designated public hospital, lower for private hospitals, and insignificant for nonprofit hospitals. Areas comprised of a relatively large population of black residents value spatial access significantly more and, for higher concentrations, exhibit a positive WTP for all hospital types. This is likely due to increased transportation costs of individuals in minority areas.
Highlights
There are approximately 8,900 hospitals in the United States, with 60 percent of those operating as nonprofits, 20 percent government owned, and the remaining 20 percent are for profit.1 Due to market failures in health care provision, it is generally accepted that some degree of government intervention is desirable
Focusing on the results when considered separately by hospital type, but without a second hospital, we find that a one mile increase in distance from the nearest public hospital for a house located at the mean distance (11 miles) in a 10 percent black neighborhood reduces house prices by $542
Research efforts to estimate the value generated by health care provision and consumption have largely relied on survey data contingent valuation estimates
Summary
There are approximately 8,900 hospitals in the United States, with 60 percent of those operating as nonprofits, 20 percent government owned, and the remaining 20 percent are for profit. Due to market failures in health care provision, it is generally accepted that some degree of government intervention is desirable. The disamenity of private hospital proximity becomes a net positive amenity for areas with about 31 percent or more of their residents who are black (i.e. proximity increases average house price) This is consistent with previous findings that black households substitute hospitals for preventative care services (Zuvekas and Taliaferro, 2003), and value hospital access more than other households. For example, we find that if a flat householder tax was used to pay all hospital construction and maintenance expenses, the resulting $395 annual payment per household would be less than the net benefits for all but the furthest households.2 This is true for areas with a higher percent of black residents and suggests that further investment in increased hospital access is justified For example, we find that if a flat householder tax was used to pay all hospital construction and maintenance expenses, the resulting $395 annual payment per household would be less than the net benefits for all but the furthest households. This is true for areas with a higher percent of black residents and suggests that further investment in increased hospital access is justified
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
