Willingness To Pay And Its Role In Health Economics

providing them hypothetical market scenarios to document their responses. Morris explains that the theoretical basis of stated preference is psychological which is often disagreed by extreme views associated with Austrian economics which state that choices in real market have relevance to economic analysis. However, most economists have the view that stated preference or willingness to pay is acceptable method if inclined with the aims of economic analysis. Olsen explains that one of the greatest challenges for publicly financed health services is the setting of priorities among competing healthcare programs. He further comments that nonhealth benefits derived from healthcare beyond the benefit derived from health outcome are important to acknowledge in economic evaluations. To capture such non-health benefits derived from healthcare WTP becomes more appropriate than just a Quality Adjusted Life Year calculated in cost utility analysis.