Journal of Risk and Uncertainty

, Volume 28, Issue 1, pp 73–95

Effects of Disease Type and Latency on the Value of Mortality Risk

Article

Abstract

We evaluate the effects of disease type and latency on willingness to pay (WTP) to reduce environmental risks of chronic, degenerative disease. Using contingent-valuation data collected from approximately 1,200 respondents in Taiwan, we find that WTP declines with latency between exposure to environmental contaminants and manifestation of any resulting disease, at a 1.5 percent annual rate for a 20 year latency period. WTP to reduce the risk of cancer is estimated to be about one-third larger than WTP to reduce risk of a similar chronic, degenerative disease. The value of risk reduction also depends on the affected organ, environmental pathway, or payment mechanism: estimated WTP to reduce the risk of lung disease due to industrial air pollution is twice as large as WTP to reduce the risk of liver disease due to contaminated drinking water.

health risk contingent valuation willingness to pay value per statistical life cancer latency Taiwan 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Alberini, A., M. Cropper, A. Krupnick, and N. B. Simon. (2002). “Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada.” Discussion Paper 02-19, Resources for the Future, Washington, D.C.Google Scholar
  2. Arrow, K., R. Solow, P. Portney, E. Leamer, R. Radner, and H. Schuman. (1993).“Report of NOAA Panel on Contingent Valuation,” Federal Register 58, 4601-4614.Google Scholar
  3. Buzby, J., R. Ready, and J. Skees. (1995). “Contingent Valuation in Food Policy Analysis: A Case Study of a Pesticide-Residue Risk Reduction,” Journal of Agricultural and Applied Economics 27, 613-625.Google Scholar
  4. Corso, P. S., J. K. Hammitt, and J. D. Graham. (2001). “Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation,” Journal of Risk and Uncertainty 23, 165-184.Google Scholar
  5. Cropper, M. L. and P. R. Portney. (1990). “Discounting and the Evaluation of Lifesaving Programs,” Journal of Risk and Uncertainty 3, 369-379.Google Scholar
  6. Cropper, M. L. and F. G. Sussman. (1990). “Valuing Future Risks to Life,” Journal of Environmental Economics and Management 19, 160-174.Google Scholar
  7. Cropper, M. L., S. K. Ayded, and P. R. Portney. (1994). “Preferences for Life Saving Programs: How the Public Discounts Time and Age,” Journal of Risk and Uncertainty 8, 243-265.Google Scholar
  8. Dreyfus, M. K. and W. K. Viscusi. (1995). “Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency,” Journal of Law and Economics 38, 79-105.Google Scholar
  9. Drèze, J. (1962). “L'Utilitè Sociale d'une Vie Humaine,” Revue Française de Recherche Opèrationelle 6, 93-118.Google Scholar
  10. Environmental Protection Agency. (1987). “Protection of Stratospheric Ozone,” Federal Register 52, 47489-47523.Google Scholar
  11. Fu, T.-T., J.-T. Liu, and J. K. Hammitt. (1999). “Consumer Willingness to Pay for Low-Pesticide Fresh Produce in Taiwan,” Journal of Agricultural Economics 50, 220-233.Google Scholar
  12. Gerking, S., M. De Haan, and W. Schulze. (1988). “The Marginal Value of Job Safety: A Contingent Valuation Study,” Journal of Risk and Uncertainty 1, 185-199.Google Scholar
  13. Hammitt, James K. (2000a). “Valuing Mortality Risk: Theory and Practice,” Environmental Science and Technology 34, 1396-1400.Google Scholar
  14. Hammitt, James K. and John D. Graham. (1999). “Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?” Journal of Risk and Uncertainty 18, 33-62.Google Scholar
  15. Hammitt, James. K. (2000b). “Evaluating Contingent Valuation of Environmental Health Risks: The Proportionality Test,” Association of Environmental and Resource Economists Newsletter 20, 14-19. Reprinted in Stated Preference: What Do We Know? Where Do We Go? (Proceedings). Report number EE-0436, U.S. Environmental Protection Agency, October.Google Scholar
  16. Hanemann, W. M., J. Loomis, and B. Kanninen. (1991). “Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation,” American Journal of Agricultural Economics 73, 1255-1261.Google Scholar
  17. Hersch, J. and T. S. Pickton. (1995). “Risk-Taking Activities and Heterogeneity of Job-Risk Tradeoffs,” Journal of Risk and Uncertainty 11, 205-217.Google Scholar
  18. Hersch, J. and W. K. Viscusi. (1990). “Cigarette Smokers, Seatbelt Use, and Differences in Wage-Risk Tradeoffs,” Journal of Human Resources 25, 202-227.Google Scholar
  19. Horowitz, J. and R. T. Carson. (1990). “Discounting Statistical Lives,” Journal of Risk and Uncertainty 3, 403-413.Google Scholar
  20. Johannesson, M., P.-O. Johansson, and K.-G. Lofgren. (1997). “On the Value of Changes in Life Expectancy: Blips Versus Parametric Changes,” Journal of Risk and Uncertainty 15, 221-239.Google Scholar
  21. Jones-Lee, M. (1974). “The Value of Changes in the Probability of Death or Injury,” Journal of Political Economy 82, 835-849.Google Scholar
  22. Jones-Lee, M. W., M. Hammerton, and P. R. Philips. (1985). “The Value of Safety: Results of a National Sample Survey,” The Economic Journal 95, 49-72.Google Scholar
  23. Kimball, M. S. (1990) “Precautionary Saving in the Small and in the Large,” Econometrica 58, 53-73.Google Scholar
  24. Krupnick, A., A. Alberini, M. Cropper, N. Simon, B. O'Brien, R. Goeree, and M. Heintzelman. (2002). “Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents,” Journal of Risk and Uncertainty 24, 161-186.Google Scholar
  25. Lee, S. J., P. J. Neumann, W. H. Churchill, M. E. Cannon, M. C. Weinstein, and M. Johannesson. (1997). “Patients' Willingness to Pay for Autologous Blood Donation,” Health Policy 40, 1-12.Google Scholar
  26. Liu, Jin-Tan and James K. Hammitt. (1999). “Perceived Risk and Value of Workplace Safety in a Developing Country,” Journal of Risk Research 2, 263-275.Google Scholar
  27. Liu, Jin-Tan, James K. Hammitt, and Jin-Long Liu. (1997). “Estimated Hedonic Wage Function and Value of Life in a Developing Country,” Economics Letters 57, 353-358.Google Scholar
  28. Magat, W. A., W. Kip Viscusi, and J. Huber. (1996). “A Reference Lottery Metric for Valuing Health,” Management Science 42, 1118-1130.Google Scholar
  29. McDaniels, T. L., M. S. Kamlet, and G. W. Fischer. (1992). “Risk Perception and the Value of Safety,” Risk Analysis 12, 495-503.Google Scholar
  30. Mendeloff, J. M. and R. M. Kaplan. (1989). “Are Large Differences in `Lifesaving' Costs Justified? A Psychometric Study of the Relative Value Placed on Preventing Deaths,” Risk Analysis 9, 349-363.Google Scholar
  31. Mitchell, R. C. and R. T. Carson. (1986). “Valuing Drinking Water Risk Reductions Using the Contingent Valuation Method: A Methodological Study of Risks from THM and Giardia.” Resources for the Future, Washington, D.C.Google Scholar
  32. Moore, M. J. and W. K. Viscusi. (1988). “The Quantity-Adjusted Value of Life,” Economic Inquiry 26, 369-388.Google Scholar
  33. Moore, M. J. and W. K. Viscusi. (1990a). “Discounting Environmental Health Risks: New Evidence and Policy Implications,” Journal of Environmental Economics and Management 18, S51-S62.Google Scholar
  34. Moore, M. J. and W. K. Viscusi. (1990b). “Models for Estimating Discount Rates for Long-Term Health Risks Using Labor Market Data,” Journal of Risk and Uncertainty 3, 381-401.Google Scholar
  35. Mrozek, J. R. and L. O. Taylor. (2002). “What Determines the Value of Life? A Meta Analysis,” Journal of Policy Analysis and Management 21, 253-270.Google Scholar
  36. National Center for Health Statistics. (1998). Health, United States. US Department of Health and Human Services, Hyattsville, Maryland.Google Scholar
  37. Ng, Y.-K. (1992). “The Older the More Valuable: Divergence Between Utility and Dollar Values of Life as One Ages,” Journal of Economics 55, 1-16.Google Scholar
  38. Payne, J. W., D. A. Schkade, W. H. Desvousges, and C. Aultman. (2000). “Valuation of Multiple Environmental Programs,” Journal of Risk and Uncertainty 21, 95-115.Google Scholar
  39. Revesz, R. L. (1999). “Environmental Regulation, Cost-Benefit Analysis, and the Discounting of Human Lives,” Columbia Law Review 99, 941-1017.Google Scholar
  40. Rosen, S. (1988). “The Value of Changes in Life Expectancy,” Journal of Risk and Uncertainty 1, 285-304.Google Scholar
  41. Savage, I. (1993). “An Empirical Investigation into the Effect of Psychological Perceptions on the Willingness-to-Pay to Reduce Risk,” Journal of Risk and Uncertainty 6, 75-90.Google Scholar
  42. Schelling, T. C. (1968). “The Life You Save May Be Your Own.” In S. B. Chase (ed.), Problems in Public Expenditure Analysis. Brookings, Washington, D.C.Google Scholar
  43. Shepard, D. S. and R. J. Zeckhauser. (1984).“Survival versus Consumption,” Management Science 30, 423-439.Google Scholar
  44. Smith, V. K., H. Kim, and D. H. Taylor. (2001). “Do the ‘Near’ Elderly Value Mortality Risks Differently?” Presented at the Workshop on Assessing and Managing Environmental and Public Health Risks, Association of Environmental and Resource Economists, Bar Harbor, Maine.Google Scholar
  45. Subramanian, U. and M. Cropper. (2000). “Public Choices Between Life Saving Programs: The Tradeoff Between Qualitative Factors and Lives Saved,” Journal of Risk and Uncertainty 21, 117-149.Google Scholar
  46. Sunstein, C. R. (1997). “Bad Deaths,” Journal of Risk and Uncertainty 14, 259-282.Google Scholar
  47. Viscusi, W. K. (1993).“The Value of Risks to Life and Health,” Journal of Economic Literature 31, 1912-1946.Google Scholar
  48. Viscusi, W. K. and J. E. Aldy. (2002). “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World.” John M. Olin Center for Law, Economics, and Business Discussion Paper No. 392, Harvard Law School, Cambridge.Google Scholar
  49. Viscusi, W. K. and J. Hersch. (2001). “Cigarette Smokers as Job Risk Takers,” Review of Economics and Statistics 83, 269-280.Google Scholar
  50. Viscusi, W. K. and M. J. Moore. (1989). “Rates of Time Preference and Valuations of the Duration of Life,” Journal of Public Economics 38, 297-317.Google Scholar
  51. Weinstein, M. C., D. S. Shepard, and J. S. Pliskin. (1980).“The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach,” Quarterly Journal of Economics 94, 373-396.Google Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.Department of Health Policy and Management and Center for Risk AnalysisHarvard School of Public HealthBostonUSA
  2. 2.Department of EconomicsNational Taiwan UniversityTaipeiTaiwan

Personalised recommendations