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The Hedonics of Hedonism - Estimating the Value of Risk-Taking Activities


  • Stefan Borsky
  • Paul A. Raschky


This paper estimates the individual willingness to pay (WTP) for the option to exercise risk-taking. We use data of 69 Austrian Ski resorts and 3,637 reported ski accidents and apply the hedonic market method. Our results suggest that the individual WTP for a hypothetical increase in the possibility to undertake risk-taking activities lies between 11% and 25% of the price of a ski-lift-ticket. Monetized values help design pricing schemes that set incentives to reduce risk-taking behavior as well as to develop alternative instruments to reduce the adverse effects of risk-taking activities (e.g. accidents). Copyright 2009 Blackwell Publishing Ltd.

Suggested Citation

  • Stefan Borsky & Paul A. Raschky, 2009. "The Hedonics of Hedonism - Estimating the Value of Risk-Taking Activities," Kyklos, Wiley Blackwell, vol. 62(2), pages 210-225, April.
  • Handle: RePEc:bla:kyklos:v:62:y:2009:i:2:p:210-225

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    References listed on IDEAS

    1. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    2. Scitovsky, Tibor, 1981. "The Desire for Excitement in Modern Society," Kyklos, Wiley Blackwell, vol. 34(1), pages 3-13.
    3. Stutzer, Alois & Frey, Bruno S., 2006. "What Happiness Research Can Tell Us About Self-Control Problems and Utility Misprediction," IZA Discussion Papers 1952, Institute for the Study of Labor (IZA).
    4. Barro, Robert J & Romer, Paul M, 1987. "Ski-Lift Pricing, with Applications to Labor and Other," American Economic Review, American Economic Association, vol. 77(5), pages 875-890, December.
    5. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    6. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    7. Harry Markowitz, 1952. "The Utility of Wealth," Journal of Political Economy, University of Chicago Press, vol. 60, pages 151-151.
    8. Milton Friedman & L. J. Savage, 1952. "The Expected-Utility Hypothesis and the Measurability of Utility," Journal of Political Economy, University of Chicago Press, vol. 60, pages 463-463.
    9. Schoemaker, Paul J H, 1993. "Determinants of Risk-Taking: Behavioral and Economic Views," Journal of Risk and Uncertainty, Springer, vol. 6(1), pages 49-73, January.
    10. Elke U. Weber & Richard A. Milliman, 1997. "Perceived Risk Attitudes: Relating Risk Perception to Risky Choice," Management Science, INFORMS, vol. 43(2), pages 123-144, February.
    11. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
    12. Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-675, November.
    13. James G. Mulligan & Emmanuel Llinares, 2003. "Market Segmentation and the Diffusion of Quality-Enhancing Innovations: The Case of Downhill Skiing," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 493-501, August.
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    Cited by:

    1. Wolff, Fran├žois-Charles, 2014. "Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1155-1164.
    2. Sergio Alessandrini, 2013. "Quality of Ski Resorts and Competition Between the Emilian Apennines and Altipiani Trentini. an Estimate of the Hedonic Price," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 5(1), pages 42-69, June.
    3. Martin Falk, 2011. "International Price Differences in Ski Lift Tickets," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(III), pages 303-336, September.

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