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On the Contingent Valuation of Safety and the Safety of Contingent Valuation: Part 1--Caveat Investigator


  • Beattie, Jane
  • Covey, Judith
  • Dolan, Paul
  • Hopkins, Lorraine
  • Jones-Lee, Michael
  • Loomes, Graham
  • Pidgeon, Nick
  • Robinson, Angela
  • Spencer, Anne


This article reports the results of two studies aimed at testing and refining a procedure for estimating willingness-to-pay based monetary values of safety using the contingent valuation method. In spite of the fact that respondents were given the opportunity to discuss various safety issues and key concepts in focus group meetings held in advance of individual interviews, and were also given ample opportunity to revise their responses in the light of the overall pattern of these responses, the results show clear evidence of extensive and persistent insensitivity to the scale and scope of the safety improvements that were specified in the contingent valuation questions, as well as vulnerability to framing effects. This clearly casts serious doubt on the reliability and validity of willingness-to-pay based monetary values of safety estimated using conventional contingent valuation procedures. Copyright 1998 by Kluwer Academic Publishers

Suggested Citation

  • Beattie, Jane & Covey, Judith & Dolan, Paul & Hopkins, Lorraine & Jones-Lee, Michael & Loomes, Graham & Pidgeon, Nick & Robinson, Angela & Spencer, Anne, 1998. "On the Contingent Valuation of Safety and the Safety of Contingent Valuation: Part 1--Caveat Investigator," Journal of Risk and Uncertainty, Springer, vol. 17(1), pages 5-25, October.
  • Handle: RePEc:kap:jrisku:v:17:y:1998:i:1:p:5-25

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    References listed on IDEAS

    1. Grether, David M, 1978. "Recent Psychological Studies of Behavior under Uncertainty," American Economic Review, American Economic Association, vol. 68(2), pages 70-74, May.
    2. David M. Grether, 1980. "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 537-557.
    3. Anderson, Matthew J. & Sunder, Shyam, 1995. "Professional Traders as Intuitive Bayesians," Organizational Behavior and Human Decision Processes, Elsevier, vol. 64(2), pages 185-202, November.
    4. Barberis, Nicholas & Shleifer, Andrei & Vishny, Robert, 1998. "A model of investor sentiment," Journal of Financial Economics, Elsevier, vol. 49(3), pages 307-343, September.
    5. repec:hrv:faseco:30747159 is not listed on IDEAS
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    7. Arrow, Kenneth J, 1982. "Risk Perception in Psychology and Economics," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 1-9, January.
    8. Shefrin, Hersh & Statman, Meir, 1994. "Behavioral Capital Asset Pricing Theory," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 29(03), pages 323-349, September.
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