Health benefits valuation in three-generation households-the role of reciprocity

Objective: This study investigates preferences for family resource allocation on health in three-generation families and examines whether reciprocity attitudes influence preferences and willingness to pay (WTP) for reducing lifetime health risk. Background: Empirical results of nonmarket valuation studies suggest that adults value improving their children's health more than their own. Such results are often explained by parental altruism, but self-interest may also be involved. Method: A choice experiment valuation survey elicited respondents' preferences for lifetime risk reduction in coronary artery disease (CAD) and a psychometric scale assessed their reciprocal attitudes. Respondents were middle-generation members of three-generation households. To conduct the analysis a hybrid mixed logit model was used that enabled including psychological factors into a utility function derived from respondents' survey choices. Results: Reciprocal attitudes had distinct effects on the middle-generation preferences for reducing family members' risk of CAD. The latent attitudes concerning reciprocity significantly affected the WTP for the health risk reduction for all family members. The impact of reciprocity on the valuation of CAD risk reduction for the respondent and the elderly parent was similar, but for the child, it was significantly higher. Conclusions: Parents' higher WTP for improving children's health, at least partially, reflects strategic decisions related to reciprocal beliefs. Reciprocity also affects the evaluation of health benefits for elderly parents and middle-aged respondents themselves. Implications: These findings may have implications regarding the degree to which the so-called "sandwich generation" can substitute for the government in the area of health and social care for the elderly.