No abstract

Efficient allocation of public funds depends upon good information about citizens' values. The purpose of this paper is to demonstrate how citizens' values can be obtained by eliciting marginal willingness to tradeoff (MWTTO) ratios for public spending categories and linking these ratios to individual, private willingness to pay. The link enables estimation of the willingness to pay for an expansion to any of the budget categories based on the elicited willingness to pay and the marginal willingness to tradeoff ratios. Tradeoff ratios and willingness to pay are estimated for public budget categories in Kentucky based on a representative sample surveyed by mail and the web in 2007. Estimates show that individuals are willing to pay the most for an expansion to educational services, followed by health care.

Abstract:Much is known about private financial returns to education in the form of higher earnings. Less is known about how much social value exceeds this private value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System (KCTCS) directly and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality and the private, non-market value combined. Our work differs from previous research by focusing on education at the community college level and by eliciting values directly through a stated-preferences survey in a way that yields a total value including any external benefits. Our preferred estimates indicate the social value of expanding the system exceeds private financial value by at least 25 percent with a best point estimate of nearly 90 percent and exceeds total private value by at least 15 percent with a best point estimate of nearly 60 percent.

The Massachusetts Health Care Reform appears to have been effective at increasing insurance take-up rates. These increases may have come at the cost of lower private insurance coverage. The number of diagnoses per admission was increased by the policy across nearly all MDCs. Understanding the changes in length of stay as a result of the Massachusetts reform, and perhaps the Affordable Care Act, requires MDC-specific analysis. It appears that the most important distinction to make is to differentiate care related to new-born babies and neonates from that related to other diagnostic categories.

No abstract