Economic valuation of psychological processes: Examining healthcare decision-making in chronic disease management

This paper examines how economic valuation - an economic process - is influenced by individual differences in goals - a psychological process. Specifically, we demonstrate how to estimate economic value in the context of health behaviors by incorporating psychological variations in goal priorities. The study is motivated by the need to better understand how healthcare interventions shape individual behaviors, particularly in the management of chronic conditions such as Cystic Fibrosis (CF). The primary contribution of this paper is conceptual, introducing a model that integrates economic and psychological processes. Empirical findings, while specific to the context studied, serve as a secondary contribution that supports and extends this conceptual framework. Using a stated-choice experiment and a best-worst experiment embedded within a survey of adults with CF, we test these interrelationships through a flexible factor-analytic choice model. The results indicate that a model linking economic and psychological processes provides a better fit than one that treats these processes independently. These findings reinforce the premise that the most accurate estimates of economic value emerge when psychological differences among individuals are appropriately represented. This approach offers a deeper understanding of how healthcare users navigate competing goals and behaviors, providing valuable insights for designing more effective interventions. Furthermore, it contributes to the broader theoretical discourse on goal setting and decision-making in healthcare contexts.