Valuing fatal risks to children and adults: Effects of disease, latency, and risk aversion
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We examine heterogeneity of willingness to pay (WTP) to reduce risks of fatal disease and trauma to adults and children. Using a stated-preference survey fielded to a large, nationally representative internet panel, we find that WTP to reduce fatal-disease risks (caused by consuming pesticide residues on foods) are similar for several types of cancer and non-cancer diseases and similar to WTP to reduce motor-vehicle crashes. WTP to reduce risk to one’s child is uniformly larger than to reduce risk to another adult or to oneself. Estimated values per statistical life are $6–10 million for adults and $12–15 million for children.
KeywordsValue of statistical life Cancer Stated preference Pesticide Children
JEL ClassificationD61 D64 H43 I18 Q18 Q51
This work was supported by the U.S. Environmental Protection Agency (R830824) and a Robert Wood Johnson Foundation Health & Society Scholars fellowship to Kevin Haninger. We thank the six physicians who reviewed the symptom descriptions for accuracy (John Ayanian, Atul Gawande, Lucian Leape, Grace Lee, Matthew Miller, Eric Schneider), Nicolas Treich who encouraged us to include a test for risk aversion in the survey (using the bonus-points lottery), Mary Evans who discussed an early version of the paper at the 2009 American Economic Association / Association of Environmental and Resource Economists annual meeting, Kip Viscusi and other conference participants at the Vanderbilt Law School Heterogeneity of the Value of Statistical Life conference, and participants at the University of Paris Descartes Health, Inequalities, Risk, and Public Policy conference, the Association of Environmental and Resource Economists, Society for Risk Analysis, and European Group of Risk and Insurance Economists annual meetings, and seminar participants at Erasmus University School of Economics.
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