Measuring the value of time in medical care analyses
This Note uses data that are independent of labor-force behavior to place a value on time spent obtaining medical care. The data were derived from the RAND Health Insurance Study. The advantage of the experimental time-value questions is that they provide measures that will be useful in health expenditure studies because they (1) elicit a time value for situations similar to a doctor visit; (2) do not depend on wage rates; and (3) treat all groups of people commensurately, whatever their labor force or health status. The experimentally-derived estimates of time values differed considerably in magnitude from wage rates, suggesting the importance of disutility associated with a doctor visit. However, the determinants of wage rates also predicted experimental time values. The correlation between experimental time value and wages is significantly greater than zero, but less than the correlation between shadow wages and actual wages for workers.