Skip to main content

Advertisement

SpringerLink
Log in

Valuing fatal risks to children and adults: Effects of disease, latency, and risk aversion

  • Published:
Journal of Risk and Uncertainty Aims and scope Submit manuscript

Abstract

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Agee, M. D., & Crocker, T. D. (1996). Parental altruism and child lead exposure: inferences from the demand for chelation therapy. Journal of Human Resources, 31, 677–691.

    Article  Google Scholar 

  • Alberini, A. (1995). Efficiency vs bias of willingness-to-pay estimates: bivariate and interval-data models. Journal of Environmental Economics and Management, 29, 169–180.

    Article  Google Scholar 

  • Alberini, A., Cropper, M., Krupnick, A., & Simon, N. B. (2004). Does the value of a statistical life vary with age and health status? Evidence from the US and Canada. Journal of Environmental Economics and Management, 48, 769–792.

    Article  Google Scholar 

  • Alberini, A., Cropper, M., Krupnick, A., & Simon, N. B. (2006). WTP for mortality risk reductions: does latency matter? Journal of Risk and Uncertainty, 32, 231–245.

    Article  Google Scholar 

  • Aldy, J. E., & Viscusi, W. K. (2008). Adjusting the value of a statistical life for age and cohort effects. Review of Economics and Statistics, 90, 573–581.

    Article  Google Scholar 

  • Barsky, R. B., Juster, F. T., Kimball, M. S., & Shapiro, M. D. (1997). Preference parameters and behavioral heterogeneity: an experimental approach in the Health and Retirement Study. Quarterly Journal of Economics, 112, 537–580.

    Article  Google Scholar 

  • Blomquist, G. C., Miller, T. R., & Levy, D. T. (1996). Values of risk reduction implied by motorist use of protection equipment: new evidence from different populations. Journal of Transport Economics and Policy, 30, 55–66.

    Google Scholar 

  • Corso, P. S., Hammitt, J. K., & Graham, J. D. (2001). Valuing mortality-risk reduction: using visual aids to improve the validity of contingent valuation. Journal of Risk and Uncertainty, 23, 165–184.

    Article  Google Scholar 

  • Cropper, M. L., & Oates, W. E. (1992). Environmental economics: a survey. Journal of Economic Literature, 30, 675–740.

    Google Scholar 

  • Cropper, M. L., & Sussman, F. G. (1990). Valuing future risks to life. Journal of Environmental Economics and Management, 19, 160–174.

    Article  Google Scholar 

  • Dickie, M. T., & Gerking, S. (2006). Valuing children’s health: parental perspectives. In P. Scapecchi (Ed.), Economic valuation of environmental health risks to children. Paris: OECD.

    Google Scholar 

  • Dickie, M., & Messman, V. L. (2004). Parental altruism and the value of avoiding acute illness: are kids worth more than parents? Journal of Environmental Economics and Management, 48, 1146–1174.

    Article  Google Scholar 

  • Drèze, J. (1962). L’Utilité Sociale d’une Vie Humaine. Revue Française de Recherche Opérationelle, 6, 93–118.

    Google Scholar 

  • Eeckhoudt, L. R., & Hammitt, J. K. (2004). Does risk aversion increase the value of mortality risk? Journal of Environmental Economics and Management, 47, 13–29.

    Article  Google Scholar 

  • European Commission. (2000). Recommended interim values for the value of preventing a fatality in DG environment cost benefit analysis. http://ec.europa.eu/environment/enveco/others/pdf/recommended_interim_values.pdf. Accessed 4 July 2009.

  • EuroQol Group. (1990). EuroQol—a new facility for the measurement of health-related quality of life. Health Policy, 16, 199–208.

    Article  Google Scholar 

  • Frederick, S., Loewenstein, G., & O’Donoghue, T. (2002). Time discounting and time preference: a critical review. Journal of Economic Literature, 40, 351–401.

    Article  Google Scholar 

  • Fuchs, V. R., & Zeckhauser, R. (1987). Valuing health—a ‘priceless’ commodity. American Economic Review, 77, 263–268.

    Google Scholar 

  • Hammitt, J. K. (2000). Evaluating contingent valuation of environmental health risks: the proportionality test. Association of Environmental and Resource Economists Newsletter, 20(1), 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 

  • Hammitt, J. K., & Graham, J. D. (1999). Willingness to pay for health protection: inadequate sensitivity to probability? Journal of Risk and Uncertainty, 18, 33–62.

    Article  Google Scholar 

  • Hammitt, J. K., & Haninger, K. (2007). Willingness to pay for food safety: sensitivity to duration and severity of illness. American Journal of Agricultural Economics, 89, 1170–1175.

    Article  Google Scholar 

  • Hammitt, J. K., & Liu, J.-T. (2004). Effects of disease type and latency on the value of mortality risk. Journal of Risk and Uncertainty, 28, 73–95.

    Article  Google Scholar 

  • Hanemann, W. M., Loomis, J., & Kanninen, B. (1991). Statistical efficiency of double-bounded dichotomous choice contingent valuation. American Journal of Agricultural Economics, 73, 1255–1261.

    Article  Google Scholar 

  • HM Treasury. (2003). The green book: Appraisal and evaluation in Central Government, London. http://www.hm-treasury.gov.uk/data_greenbook_index.htm. Accessed 4 July 2009.

  • Jenkins, R. R., Owens, N., & Wiggins, L. B. (2001). Valuing reduced risks to children: the case of bicycle safety helmets. Contemporary Economic Policy, 19, 397–408.

    Article  Google Scholar 

  • Johannesson, M., Johansson, P.-O., Kristom, B., & Gerdtham, U.-G. (1993). Willingness to pay for antihypertensive therapy—further results. Journal of Health Economics, 12, 95–108.

    Article  Google Scholar 

  • Jones-Lee, M. W. (1974). The value of changes in the probability of death or injury. Journal of Political Economy, 82, 835–849.

    Article  Google Scholar 

  • Jones-Lee, M. W., Hammerton, M., & Philips, P. R. (1985). The value of safety: results of a national sample survey. Economic Journal, 95, 49–72.

    Article  Google Scholar 

  • Kochi, I., Hubbell, B., & Kramer, R. (2006). An empirical Bayes approach to combining and comparing estimates of the value of a statistical life for environmental policy analysis. Environmental and Resource Economics, 34, 385–406.

    Article  Google Scholar 

  • Li, C.-Z., & Mattson, L. (1995). Discrete choice under preference uncertainty: an improved structural model for contingent valuation. Journal of Environmental Economics and Management, 28, 256–269.

    Article  Google Scholar 

  • Liu, J.-T., Hammitt, J. K., Wang, J.-D., & Liu, J.-L. (2000). Mother’s willingness to pay for her own and her child’s health: a contingent valuation survey in Taiwan. Health Economics, 9, 319–326.

    Article  Google Scholar 

  • Magat, W. A., Viscusi, W. K., & Huber, J. (1996). A reference lottery metric for valuing health. Management Science, 42, 1118–1130.

    Article  Google Scholar 

  • 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 

  • Revesz, R. L. (1999). Environmental regulation, cost-benefit analysis, and the discounting of human lives. Columbia Law Review, 99, 941–1017.

    Article  Google Scholar 

  • Rothschild, M., & Stiglitz, J. E. (1970). Increasing Risk: 1. A definition. Journal of Economic Theory, 2, 225–243.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • Shaw, J. W., Johnson, J. A., & Coons, S. J. (2005). US valuation of the EQ-5D health states: development and testing of the D1 valuation model. Medical Care, 43, 203–220.

    Article  Google Scholar 

  • Shepard, D. S., & Zeckhauser, R. J. (1984). Survival versus consumption. Management Science, 30, 423–439.

    Article  Google Scholar 

  • Sunstein, C. R. (1997). Bad deaths. Journal of Risk and Uncertainty, 14, 259–282.

    Article  Google Scholar 

  • Sunstein, C. R. (2004). Valuing life: a plea for disaggregation. Duke Law Journal, 45, 385–445.

    Google Scholar 

  • U.S. Office of Management and Budget. (2008). 2009 discount rates for OMB Circular No. A-94. December 12.

  • Van Houtven, G., Sullivan, M. B., & Dockins, C. (2008). Cancer premiums and latency effects: a risk-tradeoff approach for valuing reductions in fatal cancer risks. Journal of Risk and Uncertainty, 36, 179–199.

    Article  Google Scholar 

  • Viscusi, W. K. (1985). A Bayesian perspective on biases in risk perception. Economic Letters, 17, 59–62.

    Article  Google Scholar 

  • Viscusi, W. K. (1989). Prospective reference theory: toward an explanation of the paradoxes. Journal of Risk and Uncertainty, 2, 235–263.

    Article  Google Scholar 

  • Viscusi, W. K., & Aldy, J. E. (2003). The value of a statistical life: a critical review of market estimates throughout the world. Journal of Risk and Uncertainty, 27, 5–76.

    Article  Google Scholar 

  • Viscusi, W. K., Magat, W. A., & Huber, J. (1987). An investigation of the rationality of consumer valuations of multiple health risks. RAND Journal of Economics, 18, 465–479.

    Article  Google Scholar 

  • Viscusi, W. K., Magat, W. A., & Forrest, A. (1988). Altruistic and private valuations of risk reduction. Journal of Policy Analysis and Management, 7, 227–245.

    Article  Google Scholar 

Download references

Acknowledgments

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.

Author information

Authors and Affiliations

  1. Center for Risk Analysis, Harvard University, 718 Huntington Ave., Boston, MA, 02115, USA

    James K. Hammitt

  2. AAAS Science & Technology Policy Fellow, U.S. Environmental Protection Agency, Washington, DC, USA

    Kevin Haninger

Authors
  1. James K. Hammitt
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Kevin Haninger
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to James K. Hammitt.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Hammitt, J.K., Haninger, K. Valuing fatal risks to children and adults: Effects of disease, latency, and risk aversion. J Risk Uncertain 40, 57–83 (2010). https://doi.org/10.1007/s11166-009-9086-9

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11166-009-9086-9

Keywords

JEL Classification

Search

Navigation