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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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Suggested Citation

  • Mikael Svensson, 2009. "Precautionary behavior and willingness to pay for a mortality risk reduction: Searching for the expected relationship," Journal of Risk and Uncertainty, Springer, vol. 39(1), pages 65-85, August.
  • Handle: RePEc:kap:jrisku:v:39:y:2009:i:1:p:65-85
    DOI: 10.1007/s11166-009-9070-4
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    References listed on IDEAS

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    1. 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.
    2. Edward Balistreri & Gary McClelland & Gregory Poe & William Schulze, 2001. "Can Hypothetical Questions Reveal True Values? A Laboratory Comparison of Dichotomous Choice and Open-Ended Contingent Values with Auction Values," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(3), pages 275-292, March.
    3. Murphy, James J. & Allen, P. Geoffrey & Stevens, Thomas H. & Weatherhead, Darryl, 2003. "A Meta-Analysis Of Hypothetical Bias In Stated Preference Valuation," Working Paper Series 14518, University of Massachusetts, Amherst, Department of Resource Economics.
    4. Krupnick, Alan & Alberini, Anna & Cropper, Maureen & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron & Heintzelman, Martin, 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 161-186, March.
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    6. 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.
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    15. 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 12 May 2009.
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    Citations

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    Cited by:

    1. Andersson, Henrik, 2013. "Consistency in preferences for road safety: An analysis of precautionary and stated behavior," Research in Transportation Economics, Elsevier, vol. 43(1), pages 41-49.
    2. Courard-Hauri David & Lauer Stephen A., 2012. "Taking "All Men Are Created Equal" Seriously: Toward a Metric for the Intergroup Comparison of Utility Functions Through Life Values," Journal of Benefit-Cost Analysis, De Gruyter, vol. 3(3), pages 1-30, August.
    3. 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.

    More about this item

    Keywords

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

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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