Dictionary
The Dictionary provides concise definitions of health economics terms, arranged alphabetically for quick reference. Use it to understand unfamiliar terminology or confirm the meaning of a specific term.
A
- Anchoring BiasStarting Point Bias, Initial Value Effect
- In stated preference research, the tendency for a respondent's stated willingness to pay to be influenced by an initial value shown during elicitation.
D
- Demand PriceMarginal Willingness to Pay, Maximum Buyer Price
- The maximum price consumers are willing to pay for a given quantity of a good, represented along a standard demand curve.
L
- LambdaCost-Effectiveness Threshold Symbol, WTP Ceiling Symbol
- The symbol conventionally used for the cost-effectiveness threshold, or willingness to pay per unit of health effect, in net monetary benefit analysis.
M
- Merit GoodMeritorious Good, Socially Encouraged Good
- A good society deems worthy of consumption regardless of an individual's own willingness to pay for it, often subsidised by government.
V
- Value of Statistical LifeVSL, Statistical Life Value
- A monetary estimate of the value society places on reducing the risk of death, derived from willingness to pay for a small risk reduction.
W
- Willingness to PayWTP, Maximum Price Payable
- The maximum amount of money an individual would give up to obtain a good or avoid a negative outcome.
- Willingness-to-Pay EstimationWTP Estimation, WTP Elicitation
- The empirical process of measuring willingness to pay, typically through stated preference methods such as contingent valuation or discrete choice experiments.
- Willingness-to-Pay ThresholdWTP Threshold, Cost-Effectiveness Willingness-to-Pay
- The maximum amount a decision-maker is prepared to pay for an additional unit of health benefit, used to judge acceptable value for money.