Individual Willingness To Pay Research Articles

Sequential choice designs to estimate the heterogeneity distribution of willingness-to-pay

Two prominent approaches exist nowadays for estimating the distribution of willingness-to-pay (WTP) based on choice experiments. One is to work in the usual preference space in which the random utility model is expressed in terms of partworths. These partworths or utility coefficients are estimated together with their distribution. The WTP and the corresponding heterogeneity distribution of WTP is derived from these results. The other approach reformulates the utility in terms of WTP (called WTP-space) and estimates the WTP and the heterogeneity distribution of WTP directly. Though often used, working in preference space has severe drawbacks as it often leads to WTP-distributions with long flat tails, infinite moments and therefore many extreme values. By moving to WTP-space, authors have tried to improve the estimation of WTP and its distribution from a modeling perspective. In this paper we will further improve the estimation of individual level WTP and corresponding heterogeneity distribution by designing the choice sets more efficiently. We will generate individual sequential choice designs in WTP space. The use of this sequential approach is motivated by findings of Yu et al. (2011) who show that this approach allows for superior estimation of the utility coefficients and their distribution. The key feature of this approach is that it uses Bayesian methods to generate individually optimized choice sets sequentially based on prior information of each individual which is further updated after each choice made. Based on a simulation study in which we compare the efficiency of this sequential design procedure with several non-sequential choice designs, we can conclude that the sequential approach improves the estimation results substantially.

Using contingent valuation to estimate the willingness of tourists to pay for urban forests: A study in Savannah, Georgia

This study estimated the monetary value of urban forests’ non-priced benefits to tourists. Data collected by a face-to-face self-administered survey of urban tourists in Savannah, Georgia, USA were used to estimate tourists’ willingness to pay (WTP) for urban forests by the contingent valuation method. Individual WTP was found higher among tourists with graduate school education. Results suggested that WTP for urban forests also increased significantly with income and destination loyalty of the tourists. Estimated mean and median WTP values were $11.25 (95% confidence interval: $7.34, $15.16) and $2.10 (95% confidence interval: $1.38, $2.82), respectively. Based on the estimated mean WTP, annual value of urban forests to tourists in Savanna in 2009 ranged from a minimum of $81 million to a maximum of $167 million with a 95% confidence interval. The annual value was $11.55 million (95% confidence interval: $7.59 million, $15.51 million) based on the estimated median WTP and assuming at least 50% of the tourists in Savannah would pay the median amount. As the mean was greatly influenced by extreme WTP values in the data, the annual value based on the median value was a more conservative estimate.

Willingness to Pay for a Quality-Adjusted Life-Year: The Individual Perspective

Objective The aim of this study was to elicit the individual willingness to pay (WTP) for a quality-adjusted life-year (QALY). Methods In a Web-based questionnaire containing contingent valuation exercises, respondents valued health changes in five scenarios. In each scenario, the respondents first valued two health states on a visual analog scale (VAS) and expressed their WTP for avoiding a decline in health from the better health state to the worse, using a payment scale followed by a bounded open contingent valuation question. Analysis WTP per QALY was calculated for QALY gains calculated using VAS valuations, as well as the Dutch EQ-5D tariffs, the two steps in the WTP estimations and each scenario. Heterogeneity in WTP per QALY ratios was examined from the perspective of: 1) household income; and 2) the level of certainty in WTP indicated by respondents. Theoretical validity was analyzed using clustered multivariate regressions. Results A total of 1091 respondents, representative of the Dutch population, participated in the survey. Mean WTP per QALY was €12,900 based on VAS valuations, and €24,500 based on the Dutch EuroQoL tariffs. WTP per QALY was strongly associated with income, varying from €5000 in the lowest to €75,400 in the highest income group. Respondents indicating higher certainty exhibited marginally higher WTP. Regression analyses confirmed expected relations between WTP per QALY, income, and other personal characteristics. Conclusion Individual WTP per QALY values elicited in this study are similar to those found in comparable studies. The use of individual valuations in social decision-making deserves attention, however.

Public versus private demand for covering long-term care expenditures

This article studies the determinants of the Willingness to Pay (WTP) for Long-Term Care (LTC) insurance coverage. Two alternatives are considered: one compulsory, financed through taxes, the other purchased on a voluntary basis and paid through a premium. WTP was elicited through open-ended contingent valuation within a survey conducted in the Italian region Emilia-Romagna about LTC population needs. We model information on individual WTP as a two-stage process, where respondents first establish their interest for LTC cover, then state their WTP. Results show that interest and WTP are influenced by different variables, and that differences arise also between the WTP for public and private coverage.

Methylnaltrexone in the Treatment of Opioid-Induced Constipation in Cancer Patients Receiving Palliative Care: Willingness-to-Pay and Cost-Benefit Analysis

When laxative regimens have failed, methylnaltrexone may be indicated for the relief of opioid-induced constipation (OIC) in patients with advanced illness receiving palliative care. A cost-benefit analysis (CBA), based on a willingness-to-pay (WTP) approach, was performed to determine if methylnaltrexone should be added to the formulary list of drugs being reimbursed by third-party payers in Canada for the treatment of cancer patients in palliative care suffering from OIC. The WTP study had two components: a decision board explaining treatment options (Component A) and a questionnaire to measure individual WTP using a bidding game approach (Component B). Component A had two options: Option 1 (laxatives only) and Option 2 (laxatives+methylnaltrexone injection). Only participants choosing Option 2 were invited to complete Component B. The results of the WTP survey were then incorporated into a CBA. Within a hypothetical cohort, additional monthly premiums that individuals were willing to pay for methylnaltrexone were compared with the monthly costs to the insurer for providing methylnaltrexone to all patients who would potentially be using it. Four hundred one Canadians, of age 18 years and older, were surveyed and yielded a WTP in additional monthly insurance premiums of Canadian dollar (CAD) $8.65 (95% confidence interval: CAD$6.17-CAD$11.13). The CBA resulted in additional CAD$89,307 with a cost of CAD$139,840 and benefits of CAD$229,147. A set of 10,000 Monte Carlo simulations resulted in average CBA savings of CAD$145,011 with a 99.86% probability of dominance. The present CBA provides pharmacoeconomic evidence for theadoption of methylnaltrexone for treating OIC in terminally ill cancer patients.

Estimating willingness to pay for medicare using a dynamic life-cycle model of demand for health insurance

Medicare is the largest health insurance program in the US. This paper uses a dynamic random utility model of demand for health insurance in a life-cycle human capital framework with endogenous production of health to calculate the individual willingness to pay (WTP) for Medicare. The model accounts for the feature that the demand for health insurance is derived through the demand for health, which is jointly determined with the production of health over the life-cycle. The WTP measure incorporates the effects of Medicare insurance on aggregate consumption through effects on medical expenditures and mortality, and consumption utility of health. The model is estimated using panel data from the Health and Retirement Study. The average WTP or change in lifetime expected utility resulting from delaying the age of eligibility to 67 is found to be $ 24,947 in 1991 dollars ($ 39,435 in 2008 dollars). However, there is considerable variation in the WTP, e.g., in 1991 dollars the WTP of individuals who have less than a high school education and are white is $ 28,347 ($ 44,810 in 2008 dollars), while the WTP of those with at least a college degree and who are neither white nor black is $ 15,584 ($ 24,635 in 2008 dollars). More generally, the less educated have a higher WTP to avoid a policy change that delays availability of Medicare benefits. Additional model simulations imply that the primary benefits of Medicare are insurance against medical expenditures with relatively smaller benefits in terms of improved health status and longevity. Medicare also leads to large increases in medical utilization due to deferring of medical care prior to eligibility.

The Hedonics of Hedonism – Estimating the Value of Risk‐Taking Activities

SUMMARYThis paper estimates the individual willingness to pay (WTP) for the option to exercise risk‐taking. We use data of 69 Austrian Ski resorts and 3,637 reported ski accidents and apply the hedonic market method. Our results suggest that the individual WTP for a hypothetical increase in the possibility to undertake risk‐taking activities lies between 11% and 25% of the price of a ski‐lift‐ticket. Monetized values help design pricing schemes that set incentives to reduce risk‐taking behavior as well as to develop alternative instruments to reduce the adverse effects of risk‐taking activities (e.g. accidents).

Asking for Individual or Household Willingness to Pay for Environmental Goods?

The aggregate welfare measure for a change in the provision of a public good derived from a contingent valuation (CV) survey will be much higher if the same elicited mean willingness to pay (WTP) is added up over individuals rather than households. A trivial fact, however, once respondents are part of multi-person households it becomes almost impossible to elicit an uncontaminated WTP measure that with some degree of confidence can be aggregated over one or the other response unit. The literature is mostly silent about which response unit to use in WTP questions and in some CV studies it is even unclear which type has actually been applied. We test for differences between individual and household WTP in a novel, web-administered, split-sample CV survey asking WTP for preserving biodiversity in old-growth coniferous forests in Norway. Two samples are asked both types of questions, but in reverse order, followed by a question with an item battery trying to reveal why WTP may differ. We find in a between-sample test that the WTP respondents state on behalf of their households is not significantly different from their individual WTP. However, within the same sample, household WTP is significantly higher than individual WTP; in particular if respondents are asked to state individual before household WTP. Our results suggest that using individual WTP as the response unit would overestimate aggregate WTP, and thus bias welfare estimates in benefit-cost analyses. Thus, the choice of response format needs to be explicitly and carefully addressed in CV questionnaire design in order to avoid the risk of unprofitable projects passing the benefit-cost test.

Who should pay the bill for promoting green electricity? An experimental study on consumer preferences

This paper presents an experimental investigation of the individual Willingness to Pay (WTP) for green electricity. The experimental design comprises a public-choice scenario and an individual-choice scenario. It involves three different payment vehicles for the public promotion of renewables: direct tax, indirect tax and CO2 tax. We test for the extent of free-riding, the impact of different payment vehicles on individual WTP and crowding-out effects caused by the public promotion of green electricity. Combined with data collected by means of a supplementary opinion survey, our results indicate that individuals prefer binding collective contributions rather than individual market-driven activities in this field.

The “ Crex crex” lament: Estimating landowners willingness to pay for corncrake conservation on Irish farmland

This paper considers farmers’ willingness to pay (WTP) to conserve an endangered Irish farmland bird, the corncrake ( Crex crex). An Irish National Farm Survey is used to produce individual farm-level WTP estimates for the year 2006. These figures are then aggregated to obtain a total value figure for the farming community of corncrake conservation in Ireland. We focus on the willingness to pay of farmers rather than the WTP of the general Irish population, as farmers will ultimately be the ones that will have to take responsibility if targets set out in the All Ireland Action Plan for corncrake conservation are to be achieved. Quantifying willingness to pay on the part of farmers can help inform the design of agri-environment schemes aimed at improving conservation of many bird species on farmland. Results indicate that the non-market benefit of corncrake conservation in Ireland may significantly outweigh the costs of existing conservation schemes.

Economic valuation of habitat defragmentation: A study of the Veluwe, the Netherlands

This paper offers an economic value assessment of a nature protection programme in the Veluwe, the Netherlands. This programme involves two defragmentation scenarios: the first scenario connects the central part of the Veluwe with river forelands in a north-eastern direction (i.e. the meadows of the IJssel river), while the second scenario is focussed on defragmentation in a south-western direction (i.e. the meadows of the Rhine river). The valuation is based on a questionnaire that was administered during face-to-face interviews in the area and through the Internet. We employ a contingent valuation approach to assess the respondents' willingness to pay for the realisation of the defragmentation scenarios. It appears that the mean willingness to pay (WTP) for the two defragmentation scenarios is € 162.2 (lognormal distribution) per respondent. Because the Veluwe is considered a nature park of national importance, we performed an aggregation of individual WTP estimates over Dutch households. With the resulting aggregate estimates we can compare the total costs and benefits of the two scenarios for habitat defragmentation in the Veluwe. In addition, we test whether respondents value the two scenarios equally. We also check whether the methods of data collection (face-to-face interviews and Internet questionnaires) have distinct influences on the stated WTP responses.

Port-induced erosion prediction and valuation of a local recreational beach

This study attempts to integrate environmental economics and coastal engineering in managing port-induced coastal erosion occurring at a common beach by using Map Ta Phut port in Thailand as a case study. The existence of the port creates coastal erosion which can be considered an externality that affects local inhabitants, and a port owner and shipping companies can be seen as “polluters”. Overlaying of aerial photographs provided strong evidence that the coastline was severely eroded after the construction of the port. Coastal engineering softwares, LITPACK and MIKE 21 PMS, were utilized to predict future shoreline positions and investigate wave patterns around the port. The port alters wave climate and the port-induced erosion is jeopardizing a local recreational beach called Nam Rin, which is projected to disappear in 5 years. A valuation of Nam Rin beach using single-bounded dichotomous choice contingent valuation method revealed individual willingness to pay (WTP) for the beach, being 867.5 baht (approximately US$ 24.8) per year. Multiplying the individual WTP with the appropriate number of population to acquire the beach protection benefit and dividing such benefit by construction and maintenance costs of a particular beach protection measure, the polluters can select a proper beach protection approach that fulfills their benefit–cost requirement.

Willingness to pay for social health insurance among informal sector workers in Wuhan, China: a contingent valuation study

Background Most of the about 140 million informal sector workers in urban China do not have health insurance. A 1998 central government policy leaves it to the discretion of municipal governments to offer informal sector workers in cities voluntary participation in a social health insurance for formal sector workers, the so-called 'basic health insurance' (BHI).MethodsWe used the contingent valuation method to assess the maximum willingness to pay (WTP) for BHI among informal sector workers, including unregistered rural-to-urban migrants, in Wuhan City, China. We selected respondents in a two-stage self-weighted cluster sampling scheme. ResultsOn average, informal sector workers were willing to pay substantial amounts for BHI (30 Renminbi (RMB), 95% confidence interval (CI) 27-33) as well as substantial proportions of their incomes (4.6%, 95% CI 4.1-5.1%). Average WTP increased significantly when any one of the copayments of the BHI was removed in the valuation: to 51 RMB (95% CI 46-56) without reimbursement ceiling; to 43 RMB (95% CI 37-49) without deductible; and to 47 RMB (95% CI 40-54) without coinsurance. WTP was higher than estimates of the cost of BHI based on past health expenditure or on premium contributions of formal sector workers. Predicted coverage with BHI declined steeply with the premium contribution at low contribution levels. When we applied equity weighting in the aggregation of individual WTP values in order to adjust for inequity in the distribution of income, mean WTP for BHI increased with inequality aversion over a plausible range of the aversion parameter. Holding other factors constant in multiple regression analysis, for a 1% increase in income WTP for BHI with different copayments increased by 0.434-0.499% (all p < 0.0001), and for a 1% increase in past health care expenditure WTP increased by 0.076-0.148% (all p < 0.0004). Being male, a migrant, or without permanent employment significantly decreased WTP for BHI. Education was not a significant determinant of WTP for BHI. ConclusionOur results suggest that Chinese municipal governments should allow informal sector workers to participate in the BHI. From a normative perspective, BHI for informal sector workers is likely to increase social welfare because average WTP for BHI is significantly higher than estimates of the average cost of BHI. We further find that informal sector workers do not value the BHI as a mechanism to recover the relatively frequent but small financial losses associated with common illnesses, but because it protects against the rare but large financial losses associated with catastrophic care. From a behavioural perspective, our results predict that at a price equal to the average premium contribution of formal sector workers 35% of informal sector workers will enrol in the BHI. Subsidies and changes in insurance attributes (e.g. including catastrophic care and portability) should be effective in increasing BHI coverage. In addition, coverage should expand with rising incomes among informal sector workers in China. Finally, adverse selection will be unlikely to be a large problem, if the BHI is offered to informal sector workers.

Public-good valuation and intra-family allocation

I derive values of marginal changes in a public good for two-person households, measured alternatively by household member i’s willingness to pay (WTP) for the good on behalf of the household, WTP i (H), or by the sum of individual WTP values across family members, WTP(C). Households are assumed to allocate their resources in efficient Nash bargains over private and common household goods. WTP i (H) is then defined by trade-offs between the public good and the household good, and WTP(C) by trade-offs of between the public good and private goods. WTP i (H) is found to be higher (lower) than WTP(C) when member i has a relatively high (low) marginal valuation of the public good, but tends on average to equal WTP(C). As a consequence, individuals tend to represent households correctly on average when questioned about the household’s WTP for a public good, even when they are purely selfish and answer truthfully. Adding all members’ WTP answers on behalf of the household then leads to double counting. Pure and paternalistic altruism (the latter attached to consumption of the public good) move each member’s WTP on behalf of the household closer to the true sum of individual WTP, but only paternalistic altruism raises this sum.

Distribution of Willingness‐to‐Pay for Speed Reduction with Non‐positive Bidders: Is Choice Modelling Consistent with Contingent Valuation?

The paper addresses the issue of consistency between two commonly employed stated preference data—referendum contingent valuation (CV) and discrete choice modelling (CM)—with respect to estimated distributions of individual willingness‐to‐pay (WTP) for non‐market goods. The policy context is that of a local externality: effective speed reduction by means of traffic‐calming in towns crossed by fast roads. In particular, data from two independent samples of the same population are contrasted. The findings show that both methods indicate that speed reduction via traffic‐calming is valued in a polarized fashion. Results from both methods are consistent with the presence of two groups of preferences: a larger group holding positive values and a smaller one with non‐positive values. While the estimates of the relative proportions of the two groups are similar across the two data sources, once the econometric analysis of the CM responses allows for polarized preferences the estimates of the distribution of individual WTP differ substantially. The results from the choice modelling survey indicate that residents are also willing to pay for other benefits from traffic‐calming, such as noise reduction and a decreased waiting time for crossing, but preferences for these are also polarized, with WTP for aesthetic improvements being positive only for those supporting effective speed control. In comparing distributions of value estimates from CM and CV, surveys practitioners should account for the effects of taste heterogeneity over externalities and take advantage of the ability to derive individual‐specific WTP estimates from panel estimation rather than simply deriving estimates for common features of the WTP distribution.

Economic value of cedar relics in Lebanon: An application of contingent valuation method for conservation

The cedar forests in Lebanon give shelter to a rich biodiversity and they constitute important mountainous relic habitats harboring a wide range of endemic, rare and threatened species, and species with economic potential. These forests, once covering the Eastern and Western mountain chains, have been the providers of quality timber for the region in historical times. The ancient practices have left the country with only 12 forest relics distributed on the Mount Lebanon chain. Even though recognized worldwide as flagship species and sites of cultural, religious and historical values, these forests have attracted limited international funds for their conservation. These funds proved not to be sustainable for long-term conservation plans; therefore a system for securing local funds for the protection of cedar forest is needed. In this context, this research study was designed having three main objectives which are firstly to illustrate the differences in the value of cedar forests between citizens and villagers, users and non-users. Secondly to identify the best ways to collect local funds and design other tools (involving for example public participation) needed in setting out a sound strategy for the conservation of the cedar forests. Thirdly to use the findings of this study as a tool to investigate in further studies and to inform and influence decision makers about the importance of a long-term conservation and sustainable use program as well as to consider a strategic approach for its sustainable use. Using an open-ended questionnaire, contingent valuation method is applied to highlight the importance of well informed population, to obtain the Willingness to Pay (WTP) for a scenario to conserve cedar forests in Lebanon; to increase their surface areas; to promote sustainable activities and to explore the degree of importance of their attributes and of the option, bequest and existence values as perceived by the Lebanese population. The WTP is tested by using a regression model relating WTP to all socio-demographic variables. The questionnaires (416) were performed in three main cities in Lebanon and in villages surrounding two nature reserves. The difference in the individual WTP value for users and non-users was approximately US$20 per household for both villagers and city dwellers. The frequency of the zero WTP value was higher for non-users. The results obtained encouraged a national initiative to create a national trust fund and to integrate symbolic fees on the amenity services associated with cedar forests.

Effect of Postoperative Experiences on Willingness to Pay to Avoid Postoperative Pain, Nausea, and Vomiting

The authors assessed the willingness to pay (WTP) for "perfect" prophylactic antiemetics and analgesics in patients who were scheduled to undergo surgery during general anesthesia. Furthermore, they determined whether postoperative experiences of pain and nausea and vomiting (PONV) changed patients' WTP. Data were collected alongside a randomized clinical trial that investigated the incidence of PONV in patients anesthetized with either inhalation anesthesia or total intravenous anesthesia. A subset of 808 consecutive patients participating in the trial completed WTP questionnaires 1 day before and 2 weeks after surgery. The outcome measure was the maximum amount of money that patients were willing to pay for "perfect" antiemetics and analgesics. Preoperative WTP and individual WTP changes after surgery were analyzed in relation to baseline characteristics and postoperative pain and PONV experiences. Prevention of postoperative pain was valued higher than prevention of PONV. The median preoperative WTP for analgesics was US dollar 35 (interquartile range, dolalr 7-69) vs. US dollar 17 (interquartile range, dollar 7-69) for antiemetics. Individual WTP changes for antiemetics were not related to PONV experience, whereas severe postoperative pain (numerical rating score > or = 8) was associated with an increase in the WTP for analgesics. Severe postoperative pain experiences increased patients' WTP for analgesics, but PONV did not increase WTP for antiemetics. The elicited WTP values were lower than those reported in previous studies, which is possibly related to differences in market culture or patients' attitudes toward postoperative pain, nausea, and vomiting.

Do consumers value nutritional labels?

The European Union is contemplating making the provision of nutritional labels in food products mandatory. Using data collected from food shoppers, we assessed consumers' valuation of nutritional labels by analysing their willingness to pay a premium for a box of cookies with a nutritional label. On average, the mean willingness to pay (WTP) for a box of cookies with a nutritional label is estimated to be about 11 per cent above the price of the box of cookies without a nutritional label. Consistent with prior expectations, our results also indicate a difference between the WTP of individuals suffering from diet-related health problems (estimated mean 13 per cent) and those who do not suffer any diet-related health problems (estimated mean 9 per cent). © Oxford University Press and Foundation for the European Review of Agricultural Economics 2006; all rights reserved.

Inter-rater and test-retest reliability of three contingent valuation question formats in south-east Nigeria.

This paper examines the inter-rater and test-retest reliability of willingness to pay (WTP) for insecticide-treated mosquito nets and net re-treatment using the bidding game (BG), binary with follow-up (BWFU) and a novel structured haggling technique (SH). Inter-rater reliability was evaluated by having two sets of interviewers administer questionnaires to 109 (BG), 110 (BWFU) and 103 (SH) randomly selected household heads. Test-retest reliability was investigated by repeating interviews on 146 (BG), 161 (BWFU) and 139 (SH) household heads one month after an initial survey. Data analysis used testing of means, Spearman's correlation and Pearson's correlation coefficient for test of reliability, while non-parametric analysis was used to determine factors causing a variation in WTP. The study was conducted in Southeast Nigeria. Inter-rater reliability coefficients were estimated for the individual's WTP for own nets, WTP for others and WTP for re-treatment. Using WTP for own nets as the best reliability estimate, the coefficients were high at values of 0.77 (C.I. 0.72-0.86), 0.75 (C.I. 0.64-0.81) and 0.74 (C.I. 0.63-0.82) in the BG, BWFU and SH, respectively. In test-retest reliability coefficients, the coefficients for WTP for own nets were low-to-moderate at values of 0.51 (C.I. 0.40-0.62), 0.41 (C.I. 0.28-0.53) and 0.56 (C.I. 0.41-0.65) for the BG, BWFU and SH groups, respectively. Factors such as gender, change in income, unplanned expenditures, stated WTP in first survey, time-to-think, external information, and subjecting respondents to more than one interview explained the lower test-retest reliability coefficients. We conclude that the CVM was reliable in the study area and the question formats had similar levels of reliability. The lower coefficients in the test-retest reliability were due to the influence of factors affecting demand that had changed in the intervening period. Standard formats for determining reliability within CVM should be developed for easy comparison of results from different studies.

Inequality in willingness-to-pay for community-based health insurance

The purpose was to provide information for devising community-based health insurance (CBI) policies that reduce inequality in enrolment and further inequality in access to health services. A two-stage cluster sampling was used in the household survey. Inequalities in willingness-to-pay (WTP) for CBI are examined by expenditure quintile using data collected from a household survey. Interviews were conducted with 2414 individuals, 705 of whom were household heads. A bidding game method was used to elicit WTP. Individuals and households were assigned to 6-month expenditure quintiles. We found that mean and median individual WTP for CBI was significantly higher for higher spending quintiles, as was mean and median household WTP. The curves of cumulative percentage of individual and household WTP shifted rightwards for higher quintiles, implying that at any given premium the lower the quintile the lower the uptake of CBI. The Gini coefficient for individual WTP and household WTP was 0.15 and 0.08, respectively, and for individual 6-month expenditure and household 6-month expenditure is 0.68 and 0.63, respectively. The results imply that the premium needs to be adjusted for income; otherwise, a lower proportion of poor people will enrol in CBI and without exemptions or subsidies the poor will have less access to health services than the rich. Thus, exemptions and subsidies for the poor for enrolling in CBI are an important issue for decision-makers with an objective of improving equity of health and helping the poor to break out of the cycle of poverty. Since the distribution of WTP by household is less unequal than the distribution of WTP by individuals, the household might be a better unit of enrolment in terms of equity than the individual.