IDEAS home Printed from https://ideas.repec.org/a/wly/riskan/v12y1992i4p495-503.html
   My bibliography  Save this article

Risk Perception and the Value of Safety

Author

Listed:
  • Timothy L. McDaniels
  • Mark S. Kamlet
  • Gregory W. Fischer

Abstract

This paper examines the relationship between perceived risk and willingness‐to‐pay (WTP)for increased safety from technological hazards in both conceptual and empirical terms. A conceptual model is developed in which a given household's WTP for risk reductions is a function of traditional socioeconomic variables (i.e., income and base level of risk)and perceived characteristics of the hazards (i.e., dread, knowledge, and exposure). Data to estimate the model are obtained through a combined contingent valuation and risk perception survey that considers 10 technological hazards, five of which are well‐defined (e.g., death rates are known and the risks are relatively common)and five are less well‐defined. Econometric results, using TOBIT estimation procedures, support the importance of both types of variables in explaining WTP across all 10 hazards. When the risks are split into two groups, the results show that WTP for well‐defined hazards is most influenced by perceived personal exposure, while WTP for less well‐defined risks is most influenced by levels of dread and severity.

Suggested Citation

  • Timothy L. McDaniels & Mark S. Kamlet & Gregory W. Fischer, 1992. "Risk Perception and the Value of Safety," Risk Analysis, John Wiley & Sons, vol. 12(4), pages 495-503, December.
    • Handle: RePEc:wly:riskan:v:12:y:1992:i:4:p:495-503
    DOI: 10.1111/j.1539-6924.1992.tb00706.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1539-6924.1992.tb00706.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1539-6924.1992.tb00706.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
    2. Smith, V Kerry & Desvousges, William H, 1987. "An Empirical Analysis of the Economic Value of Risk Changes," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 89-114, February.
    3. Linnerooth, Joanne, 1979. "The Value of Human Life: A Review of the Models," Economic Inquiry, Western Economic Association International, vol. 17(1), pages 52-74, January.
    4. Harry Otway, 1985. "Multidimensional Criteria for Technology Acceptability: A Response to Bernard L. Cohen," Risk Analysis, John Wiley & Sons, vol. 5(4), pages 271-273, December.
    5. Milton C. Weinstein & Donald S. Shepard & Joseph S. Pliskin, 1980. "The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 373-396.
    6. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    7. V. Kerry Smith, 1986. "Benefit Analysis for Natural Hazards," Risk Analysis, John Wiley & Sons, vol. 6(3), pages 325-334, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Poe, Gregory L. & Bishop, Richard C., 1992. "Measuring the Benefits of Groundwater Protection from Agricultural Contamination: Results from a Two-Stage Contingent Valuation Study," Staff Papers 200549, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    2. John K. Horowitz & Richard T. Carson, 1993. "Baseline Risk and Preference for Reductions in Risk‐to‐Life," Risk Analysis, John Wiley & Sons, vol. 13(4), pages 457-462, August.
    3. Peter Nijkamp & Chiara Maria Travisi & Gabriella Vindigni, 2002. "Pesticide Risk Valuation in Empirical Economics," Tinbergen Institute Discussion Papers 02-112/3, Tinbergen Institute.
    4. Dorte Gyrd‐Hansen & Jes Søgaard, 2001. "Analysing public preferences for cancer screening programmes," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 617-634, October.
    5. Georges Dionne & Martin Lebeau, 2010. "Le calcul de la valeur statistique d’une vie humaine," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 487-530.
    6. Bellavance, Franois & Dionne, Georges & Lebeau, Martin, 2009. "The value of a statistical life: A meta-analysis with a mixed effects regression model," Journal of Health Economics, Elsevier, vol. 28(2), pages 444-464, March.
    7. Tsu‐Tan Fu & Jin‐Tan Liu & James K. Hammitt, 1999. "Consumer Willingness to Pay for Low‐Pesticide Fresh Produce in Taiwan," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 220-233, May.
    8. Kuchler, Fred & Golan, Elise H., 1999. "Assigning Values To Life: Comparing Methods For Valuing Health Risks," Agricultural Economic Reports 34037, United States Department of Agriculture, Economic Research Service.
    9. Richard T. Carson & Robert Cameron Mitchell, 2006. "Public Preferences Toward Environmental Risks: The Case of Trihalomethanes," Chapters, in: Anna Alberini & James R. Kahn (ed.), Handbook on Contingent Valuation, chapter 19, Edward Elgar Publishing.
    10. repec:ebl:ecbull:v:4:y:2007:i:14:p:1-10 is not listed on IDEAS
    11. Liu, Liqun & Neilson, William S., 2006. "Endogenous private safety investment and the willingness to pay for mortality risk reductions," European Economic Review, Elsevier, vol. 50(8), pages 2063-2074, November.
    12. Jeffrey Wagner & Luiz Freitas, 2007. "Capturing moral economic context," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-10.
    13. Cox, Thomas L. & Ziemer, Rod F. & Chavas, Jean-Paul, 1984. "Household Demand For Fresh Potatoes: A Disaggregated Cross-Sectional Analysis," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(01), pages 1-17, July.
    14. MacKenzie, John & Weaver, Thomas F., 1986. "A Household Production Analysis Of Fuelwood Demand In Rhode Island," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(01), pages 1-8, April.
    15. Spencer Henson, 1996. "Consumer Willingness To Pay For Reductions In The Risk Of Food Poisoning In The Uk," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 403-420, January.
    16. Ward, Clement E. & Lusk, Jayson L. & Dutton, Jennifer M., 2008. "Implicit Value of Retail Beef Product Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-18.
    17. Vredin Johansson, Maria & Heldt, Tobias & Johansson, Per, 2006. "The effects of attitudes and personality traits on mode choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(6), pages 507-525, July.
    18. Bernd Süssmuth, 2012. "The Econometric Analysis of Willingness to Pay for Intangibles with Experience Good Character," Chapters, in: Wolfgang Maennig & Andrew Zimbalist (ed.), International Handbook on the Economics of Mega Sporting Events, chapter 14, Edward Elgar Publishing.
    19. Reynolds, Travis & Kolodinsky, Jane & Murray, Byron, 2012. "Consumer preferences and willingness to pay for compact fluorescent lighting: Policy implications for energy efficiency promotion in Saint Lucia," Energy Policy, Elsevier, vol. 41(C), pages 712-722.
    20. Alston Lee J. & Mueller Bernardo, 2018. "Priests, Conflicts and Property Rights: the Impacts on Tenancy and Land Use in Brazil," Man and the Economy, De Gruyter, vol. 5(1), pages 1-26, June.
    21. Czajkowski, Mikołaj & Zagórska, Katarzyna & Letki, Natalia & Tryjanowski, Piotr & Wąs, Adam, 2021. "Drivers of farmers’ willingness to adopt extensive farming practices in a globally important bird area," Land Use Policy, Elsevier, vol. 107(C).

    More about this item

    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:wly:riskan:v:12:y:1992:i:4:p:495-503. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1539-6924 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.