Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 214: Willingness to Pay for Hormone Replacement Therapy

Niklas Zethraeus () and Per-Olov Johansson ()
Additional contact information
Niklas Zethraeus: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden
Per-Olov Johansson: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: This study addresses the question of willingness to pay (WTP) for hormone replacement therapy (HRT) in order to alleviate menopayusal symptoms. A utility model is specified where the individual obtains utility from consumption of goods and health. The purchase of a treatment is represented as a shift in the health production function during the treatment period. The mean WTP for the HRT is estimated using a parametric and a non-parametric method. The mean WTP based on these two methods is similar in both cases and amounts to about SEK 40,000 per year. Further, it is shown that the mean WTP is above the mean treatment costs of HRT. Finally, the implied WTP per gained quality adjusted life year is estimated at about SEK 120,000 and SEK 160,000 based on the rating scale (RS) and time trade-off (TTO) methods, respectively.

Keywords: Hormone replacement therapy; menopausal symptoms; willingness to pay.

JEL-codes: D61; D91; I10; I12

27 pages, December 18, 1997

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