The application of CVM for assessing the tele-health system: an analysis of the discrepancy between WTP and WTA based on survey data

This paper analyzes the applicability of CVM (Contingent Valuation Method) for the economic assessment of the tele-health system. By focusing on the discrepancy between WTP (Willingness to pay) and WTA (Willingness to accept), we decompose the discrepancy into income and endowment effect according to the method used by Morrison [21, 22]. We also closely examine the endowment effect, and break it down into several components. It is noted that the portion, which was thought to be the endowment effect, contains imaginary as well as subsidy biases, and the endowment effect is not as large as previously estimated.