Menu choice stated preference tasks to capture demand complementarity in health.

ABSTRACT

Health programs/services are often bundled, allowing for both substitution and complementarity. We adapt Discrete Choice Experiments to capture bundling, with application to a case study of exercise and nutrition; complementarity arises due to the goal of improving health. Our contributions are (1) to present a menu-based choice experiment to explore bundling; (2) to analyse the menu-based data using an extension of the choice set generation model (GenL) to account for correlations between bundles and component singles. A nationally representative sample of 333 Australians chose between a nutrition program only; exercise program only; both nutrition and exercise programs; or their status quo. Overall, we show that by incorporating the menu choice task and introducing the combined alternative, we capture a significant portion of the population seeking both exercise and nutrition components. We estimate a latent class GenL model, and identify two latent classes Class 1 preferred to choose programs on offer, and Class 2 was more price sensitive and had a stronger preference for staying with their status quo. We show in the post-estimation analysis that heterogeneity in preferences translates into heterogeneity in the way alternatives are bundled, indicating that the combined offering is appealing to specific classes of individuals who prefer bundling. By implementing the menu choice task, researchers and policymakers can effectively identify, cater to and influence the demand for combined exercise and nutrition options, leading to more targeted and impactful interventions in promoting healthier lifestyle choices.