Willingness to pay for long-term home care services: Evidence from a stated preferences analysis

• Published in: The journal of the economics of ageing 2020-10, Vol.17, p.100238, Article 100238
• Main Authors: Amilon, Anna, Ladenburg, Jacob, Siren, Anu, Vernstrøm Østergaard, Stine
• Format: Article
• Language: English
• Subjects: discrete choice experiment; long-term home care; willingness to pay
• ISSN: 2212-828X
• DOI: 10.1016/j.jeoa.2020.100238

Population aging is expected to result in an increased demand for long-term home care services world-wide. In Denmark, long-term home care is predominately provided by local municipalities and is publicly financed. This paper uses a stated preferences approach to study the willingness to pay (WTP) for various components of long-term home care services, using household taxes as the payment vehicle. In our discrete choice experiment, we ask respondents to consider a hypothetical individual – an 83-year-old woman with physical limitations who lives alone – and to choose among various service packages for her. We find that respondents, on average, have strong preferences for improving long-term home care services. However, these average results are strongly driven by positive WTP among respondents with left-wing political views. Furthermore, WTP is positively associated with age, which implies an increasing demand for improved services as longevity increases. We conclude that WTP for tax-financed, long-term home care services is closely linked to respondent characteristics.