Willingness to Pay for Private and Public Safety: Why the Difference?
AbstractPrevious research on the willingness to pay (WTP) for risk reductions has almost systematically found the mean WTP for public risk reductions to be, both economically and statistically, significantly smaller than the mean WTP for private risk reductions. In this paper, we use socio-economic and social-psychological variables to gain insights into this, according to economic theory, anomalous result. Based on the results from a purpose-made survey, we find that part of the discrepancy can be explained by the individuals' age and his/her attitudes towards privately and publicly provided goods in general. Due to differences in attitudes, the public and private goods are in fact perceived as a two different goods, even if the risk reductions are of equal magnitudes. The results therefore suggest that, in cases where the elicited WTP is intended for public policy purposes, the survey context need to be public is consumer sovereignty should reign.
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Bibliographic InfoPaper provided by Örebro University, School of Business in its series Working Papers with number 2007:2.
Length: 33 pages
Date of creation: 30 Apr 2007
Date of revision:
Publication status: Published in Accident Analysis & Prevention, 2010, pages 1205-1212.
Contact details of provider:
Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
Phone: 019-30 30 00
Fax: 019-33 25 46
Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/
More information through EDIRC
Contingent Valuation; Private Safety; Public Safety; Attitudes;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
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