Abstract
In recent years, a growing number of studies have used the contingent valuation method to value health care in monetary terms. Only very few studies employ methods based on market data. One reason for this may be that some doubts have existed about the applicability of such models in the field of health economics. A theoretical model for the use of market prices to evaluate health care is discussed. The random utility approach is used to formulate a travel cost model. An auxiliary cost function is introduced, thus allowing the data to determine the cost of time, and the kilometer cost of transport. An empirical application is made to mammography. The results leave many questions unanswered. However, the estimated welfare changes and the measures of the implicit values of a statistical life appear reasonable. A conclusion from the study is that market based valuation methods can fruitfully be applied to health economic problems.