The Citizens' Distributional Preferences for Health Care Resource Allocations: The Non-Negligible Role of Option Value

Abstract

The stated preference literature on equity in health aims to enhance our understanding of the public's preferences for allocation of health resources to promote fairness and justice in the distribution of healthcare. This paper explores how different elicitation approaches impact on the elicited distributional preferences in the context of health. We randomly allocated respondents to one of two elicitation approaches: the ex post social decision maker perspective and the private ex ante insurance perspective. Respondents were asked to make choices between healthcare resource allocation distributions that follow different priority rules regarding maximization and equality. We find that preferences differ across the two approaches with the health maximization objective receiving less support under the ex ante perspective. The contribution of this paper is to demonstrate that option value, in addition to inequality aversion, provides an important argument for average citizens' distributional preferences, and that both sets of preferences may represent important inputs to policy making.