Estimating Willingness to Pay for Dementia Prevention and Policy Implications

Abstract

In Korea, the social cost of dementia is rapidly increasing due to rapid aging. This study estimates the public's willingness to pay(WTP) for dementia prevention, to provide policy implications for dementia management. Using contingent valuation method(CVM), the average per capita WTP amount for dementia prevention was estimated to be KRW 80,955,973. As a result, the social cost of preventing as many dementia patients as in 2021 turned out to be KRW 78.7245 trillion. The cost of dementia incurred during the lifespan of dementia patients was KRW 205.378 trillion, 2.6 times higher than the prevention cost. The difference between the cost of dementia and prevention cost is expected to expand rapidly over time. In particular, the cost of dementia for elderly patients in 2060 was estimated to be KRW 1,630 trillion during their lifetime, 5.8 times greater than the prevention cost of KRW 280 trillion. In addition, due to the low fertility rate in Korea, the burden of costs for elderly dementia patients among the working-age population was estimated at KRW 13.29 million per person per year. In the future, the cost of dementia, thus the gap with prevention costs, is espected to increase rapidly. In particular, the social costs for the families of dementia patients are huge and the burden of supporting elderly dementia patients in the working-age population will increase. This study concludes prevention of dementia is more important than ex post management. As policy recommendations, this study emphasized the importance of people’s cooperation and the connection of related policies to respond to the dementia problem by giving several examples.