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Precautionary behavior and willingness to pay for a mortality risk reduction: Searching for the expected relationship

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  • Mikael Svensson

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Abstract

This paper examines within-sample correlation between six different precautionary behaviors and willingness to pay for a mortality risk reduction. The paper also shows estimates of the value of a statistical life based on seat belt and bicycle helmet usage as well as based on the stated willingness to pay for a risk reduction in traffic mortality. Contrary to the theoretical expectations, no correlation is found between precautionary behavior and willingness to pay, which is problematic for the validity of contingent valuation answers. One major explanation is that females and the elderly take more precaution, but states a lower WTP for a risk reduction. The estimates of VSL from the different approaches are $11.0, $6.4 and $5.5 million from stated WTP, seat belt use and bicycle helmet use, respectively.

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File URL: http://hdl.handle.net/10.1007/s11166-009-9070-4
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Bibliographic Info

Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 39 (2009)
Issue (Month): 1 (August)
Pages: 65-85

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Handle: RePEc:kap:jrisku:v:39:y:2009:i:1:p:65-85

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Web page: http://www.springerlink.com/link.asp?id=100299

Related research

Keywords: Value of a statistical life; Stated preference; Risk behavior; D6; D8; I1;

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References

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  1. Atkinson, Scott E & Halvorsen, Robert, 1990. "The Valuation of Risks to Life: Evidence from the Market for Automobiles," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 133-36, February.
  2. Svensson, Mikael, 2006. "The Value of a Statistical Life in Sweden Estimates from Two Studies using the "Certainty Approach" Calibration," Working Papers 2006:6, Örebro University, School of Business, revised 25 Jul 2007.
  3. Orley Ashenfelter & Michael Greenstone, 2004. "Using Mandated Speed Limits to Measure the Value of a Statistical Life," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S226-S267, February.
  4. Viscusi, W Kip & Aldy, Joseph E, 2003. " The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
  5. Lanoie, Paul & Pedro, Carmen & Latour, Robert, 1995. "The Value of a Statistical Life: A Comparison of Two Approaches," Journal of Risk and Uncertainty, Springer, vol. 10(3), pages 235-57, May.
  6. Ted Gayer & James T. Hamilton & W. Kip Viscusi, 2002. "The Market Value of Reducing Cancer Risk: Hedonic Housing Prices with Changing Information," Southern Economic Journal, Southern Economic Association, vol. 69(2), pages 266-289, October.
  7. Blomquist, Glenn C, 1979. "Value of Life Saving: Implications of Consumption Activity," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 540-58, June.
  8. Neil A. Powe & Ian J. Bateman, 2004. "Investigating Insensitivity to Scope: A Split-Sample Test of Perceived Scheme Realism," Land Economics, University of Wisconsin Press, vol. 80(2), pages 258-271.
  9. Dardis, Rachel, 1980. "The Value of a Life: New Evidence from the Marketplace," American Economic Review, American Economic Association, vol. 70(5), pages 1077-82, December.
  10. Balistreri, Edward J. & Poe, Gregory L. & McClelland, Gary H. & Schulze, William D., 1996. "Can Hypothetical Questions Reveal True Values? A Laboratory Comparison of Dichotomous Choice and Open-Ended Contingent Values with Auction Values," Working Papers 127865, Cornell University, Department of Applied Economics and Management.
  11. Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
  12. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
  13. Lars Hultkrantz & Gunnar Lindberg & Camilla Andersson, 2006. "The value of improved road safety," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 151-170, March.
  14. Kip Viscusi, W. & Magat, Wesley A. & Huber, Joel, 1991. "Pricing environmental health risks: survey assessments of risk-risk and risk-dollar trade-offs for chronic bronchitis," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 32-51, July.
  15. Jahn K. Hakes & W. Kip Viscusi, 2007. "Automobile Seatbelt Usage and the Value of Statistical Life," Southern Economic Journal, Southern Economic Association, vol. 73(3), pages 659–676, January.
  16. Robin R. Jenkins & Nicole Owens & Lanelle Bembenek Wiggins, 2001. "Valuing Reduced Risks To Children: The Case Of Bicycle Safety Helmets," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 397-408, October.
  17. Krupnick, Alan, et al, 2002. " Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 161-86, March.
  18. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, 03.
  19. Donald S. Shepard & Richard J. Zeckhauser, 1984. "Survival versus Consumption," Management Science, INFORMS, vol. 30(4), pages 423-439, April.
  20. repec:reg:rpubli:282 is not listed on IDEAS
  21. Evans, Mary F. & Smith, V. Kerry, 2006. "Do we really understand the age-VSL relationship?," Resource and Energy Economics, Elsevier, vol. 28(3), pages 242-261, August.
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Citations

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Cited by:
  1. Hultkrantz, Lars & Svensson, Mikael, 2012. "The value of a statistical life in Sweden: A review of the empirical literature," Health Policy, Elsevier, vol. 108(2), pages 302-310.
  2. Andersson, Henrik, 2012. "Consistency in preferences for road safety: An analysis of precautionary and stated behavior," LERNA Working Papers 12.25.382, LERNA, University of Toulouse.

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