IDEAS home Printed from https://ideas.repec.org/a/anr/reseco/v5y2013p245-260.html
   My bibliography  Save this article

Valuing Reductions in Environmental Risks to Children’s Health

Author

Listed:
  • Shelby Gerking

    () (Department of Economics, University of Central Florida, Orlando, Florida 32816-1400
    Department of Economics and Tilburg Sustainability Center, Tilburg University, 5000LE Tilburg, The Netherlands)

  • Mark Dickie

    () (Department of Economics, University of Central Florida, Orlando, Florida 32816-1400)

Abstract

This article reviews the economics literature dealing with valuation of reduced environmental risks to children’s health. We describe conceptual models together with results from a number of empirical studies. The conceptual models analyze valuation issues from the perspective of parents; treat health risk as endogenously determined; and demonstrate that in equilibrium, marginal willingness to pay to reduce risk for the child relative to marginal willingness to pay to reduce risk for the parent should equal the ratio of marginal risk reduction costs. Empirical studies treat both mortality and morbidity associated with exposure to environmental health risks. These studies generally find that parents are willing to pay more for absolute risk reductions for their children than they are willing to pay for corresponding risk reductions for themselves. Possible reasons for this outcome along with suggestions for further research are discussed.

Suggested Citation

  • Shelby Gerking & Mark Dickie, 2013. "Valuing Reductions in Environmental Risks to Children’s Health," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 245-260, June.
  • Handle: RePEc:anr:reseco:v:5:y:2013:p:245-260
    as

    Download full text from publisher

    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-091912-151940
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Christopher J. Ruhm, 2000. "Are Recessions Good for Your Health?," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 617-650.
    3. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, pages 131-166.
    4. Davis, Steven J. & Haltiwanger, John, 2001. "Sectoral job creation and destruction responses to oil price changes," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 465-512, December.
    5. Yongyang Cai & Kenneth L. Judd & Thomas S. Lontzek, 2013. "The Social Cost of Stochastic and Irreversible Climate Change," NBER Working Papers 18704, National Bureau of Economic Research, Inc.
    6. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
    7. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271 Elsevier.
    8. Mads Greaker & Tom-Reiel Heggedal, 2012. "A Comment on the Environment and Directed Technical Change," Discussion Papers 713, Statistics Norway, Research Department.
    9. Garth Heutel & Christopher J. Ruhm, 2016. "Air Pollution and Procyclical Mortality," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 667-706.
    10. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    11. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February.
    12. Timothy J. Bartik, 2012. "Including Jobs in Benefit-Cost Analysis," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 55-73, August.
    13. Rajeev Dhawan & Karsten Jeske & Pedro Silos, 2010. "Productivity, Energy Prices and the Great Moderation: A New Link," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 715-724, July.
    14. Gillingham, Kenneth & Newell, Richard G. & Pizer, William A., 2008. "Modeling endogenous technological change for climate policy analysis," Energy Economics, Elsevier, vol. 30(6), pages 2734-2753, November.
    15. Benhabib, Jess & Rogerson, Richard & Wright, Randall, 1991. "Homework in Macroeconomics: Household Production and Aggregate Fluctuations," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1166-1187, December.
    16. Narayan, Paresh Kumar & Narayan, Seema & Smyth, Russell, 2011. "Energy consumption at business cycle horizons: The case of the United States," Energy Economics, Elsevier, vol. 33(2), pages 161-167, March.
    17. Fischer, Carolyn & Springborn, Michael, 2011. "Emissions targets and the real business cycle: Intensity targets versus caps or taxes," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 352-366.
    18. Sjak Smulders & Corrado Di Maria, 2012. "The Cost of Environmental Policy under Induced Technical Change," CESifo Working Paper Series 3886, CESifo Group Munich.
    19. Mattauch, Linus & Creutzig, Felix & Edenhofer, Ottmar, 2015. "Avoiding carbon lock-in: Policy options for advancing structural change," Economic Modelling, Elsevier, vol. 50(C), pages 49-63.
    20. Michael Greenstone & John A. List & Chad Syverson, 2011. "The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing," Working Papers 11-03, Center for Economic Studies, U.S. Census Bureau.
    21. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
    22. Popp, David, 2004. "ENTICE: endogenous technological change in the DICE model of global warming," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 742-768, July.
    23. Jean-Charles Hourcade & Antonin Pottier & Etienne Espagne, 2011. "The Environment and Directed Technical Change: Comment," Working Papers 2011.95, Fondazione Eni Enrico Mattei.
    24. Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
    25. Lawrence J. Christiano & Martin Eichenbaum & Robert Vigfusson, 2003. "What Happens After a Technology Shock?," NBER Working Papers 9819, National Bureau of Economic Research, Inc.
    26. David Popp, 2010. "Innovation and Climate Policy," NBER Working Papers 15673, National Bureau of Economic Research, Inc.
    27. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
    28. Mikhail Golosov & John Hassler & Per Krusell & Aleh Tsyvinski, 2014. "Optimal Taxes on Fossil Fuel in General Equilibrium," Econometrica, Econometric Society, vol. 82(1), pages 41-88, January.
    29. Konstantinos Angelopoulos & George Economides & Apostolis Philippopoulos, "undated". "What is the best environmental policy? Taxes, permits and rules under economic and environmental uncertainty," DEOS Working Papers 1013, Athens University of Economics and Business.
    30. Kim, In-Moo & Loungani, Prakash, 1992. "The role of energy in real business cycle models," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 173-189, April.
    31. Carbone, Jared C. & Smith, V. Kerry, 2008. "Evaluating policy interventions with general equilibrium externalities," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1254-1274, June.
    32. V. Kerry Smith & Carlos Valcarcel Wolloh, 2012. "Has Surface Water Quality Improved Since the Clean Water Act?," NBER Working Papers 18192, National Bureau of Economic Research, Inc.
    33. Peretto, Pietro F., 2009. "Energy taxes and endogenous technological change," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 269-283, May.
    34. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
    35. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    36. Bencivenga, Valerie R, 1992. "An Econometric Study of Hours and Output Variation with Preference Shocks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(2), pages 449-471, May.
    37. Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
    38. Gilbert E. Metcalf, 2009. "Market-Based Policy Options to Control U.S. Greenhouse Gas Emissions," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 5-27, Spring.
    39. Dissou, Yazid & Karnizova, Lilia, 2016. "Emissions cap or emissions tax? A multi-sector business cycle analysis," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 169-188.
    40. Yongsung Chang & Sun-Bin Kim, 2007. "Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations," American Economic Review, American Economic Association, vol. 97(5), pages 1939-1956, December.
    41. David Popp, 2010. "Innovation and Climate Policy," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 275-298, October.
    42. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carla Guerriero & John Cairns & Fabrizio Bianchi & Liliana Cori, 2016. "Are Children Rational Decision Makers when they are Asked to Value their own Health? A Contingent Valuation Study Conducted with Children and their Parents," CSEF Working Papers 448, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2014. "Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, pages 481-519.
    3. Hammitt, James K. & Haninger, Kevin, 2017. "Valuing nonfatal health risk as a function of illness severity and duration: Benefit transfer using QALYs," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 17-38.

    More about this item

    Keywords

    mortality risk; morbidity risk; parents' marginal willingness to pay; environmental hazards;

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:reseco:v:5:y:2013:p:245-260. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (http://www.annualreviews.org). General contact details of provider: http://www.annualreviews.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.