Willingness to Pay for Private and Public Safety: Why the Difference?
Previous research on the willingness to pay (WTP) for risk reductions has almost systematically found the mean WTP for public risk reductions to be, both economically and statistically, significantly smaller than the mean WTP for private risk reductions. In this paper, we use socio-economic and social-psychological variables to gain insights into this, according to economic theory, anomalous result. Based on the results from a purpose-made survey, we find that part of the discrepancy can be explained by the individuals' age and his/her attitudes towards privately and publicly provided goods in general. Due to differences in attitudes, the public and private goods are in fact perceived as a two different goods, even if the risk reductions are of equal magnitudes. The results therefore suggest that, in cases where the elicited WTP is intended for public policy purposes, the survey context need to be public is consumer sovereignty should reign.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||30 Apr 2007|
|Date of revision:|
|Publication status:||Published in Accident Analysis & Prevention, 2010, pages 1205-1212.|
|Contact details of provider:|| Postal: Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden|
Phone: 019-30 30 00
Fax: 019-33 25 46
Web page: http://www.oru.se/Institutioner/Handelshogskolan-vid-Orebro-universitet/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carson, Richard T & Groves, Theodore, 2010.
"Incentive and Information Properties of Preference Questions,"
University of California at San Diego, Economics Working Paper Series
qt88d8644g, Department of Economics, UC San Diego.
- Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
- Jason F. Shogren, 1990.
"Impact of Self-Protection and Self-Insurance on Individual Response to Risk, The,"
Center for Agricultural and Rural Development (CARD) Publications
90-wp53, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Shogren, Jason F., 1990. "Impact of Self-Protection and Self-Insurance on Individual Response to Risk (The)," Staff General Research Papers Archive 297, Iowa State University, Department of Economics.
- Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July.
- Johannesson, Magnus & Johansson, Per-Olov & O'Conor, Richard M, 1996.
"The Value of Private Safety versus the Value of Public Safety,"
Journal of Risk and Uncertainty,
Springer, vol. 13(3), pages 263-75, November.
- Johannesson, Magnus & Johansson, Per-Olov & O'Conor, Richard M., 1996. "The Value of Private Safety versus the Value of Public Safety," SSE/EFI Working Paper Series in Economics and Finance 103, Stockholm School of Economics.
- Heberlein, Thomas A. & Wilson, Matthew A. & Bishop, Richard C. & Schaeffer, Nora Cate, 2005. "Rethinking the scope test as a criterion for validity in contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 1-22, July.
- Jones-Lee, M W, 1992. "Paternalistic Altruism and the Value of Statistical Life," Economic Journal, Royal Economic Society, vol. 102(410), pages 80-90, January.
- Atkinson, Scott E & Halvorsen, Robert, 1990. "The Valuation of Risks to Life: Evidence from the Market for Automobiles," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 133-36, February.
- Kip Viscusi, W. & Magat, Wesley A. & Huber, Joel, 1991. "Pricing environmental health risks: survey assessments of risk-risk and risk-dollar trade-offs for chronic bronchitis," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 32-51, July.
- Neil A. Powe & Ian J. Bateman, 2004. "Investigating Insensitivity to Scope: A Split-Sample Test of Perceived Scheme Realism," Land Economics, University of Wisconsin Press, vol. 80(2), pages 258-271.
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
- Smith, V. Kerry, 1992. "Arbitrary values, good causes, and premature verdicts," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 71-89, January.
- Hammitt, James K & Graham, John D, 1999. "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 33-62, April.
- Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
- Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
- Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
- Kahneman, Daniel & Ritov, Ilana & Schkade, David A, 1999. "Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 203-35, December.
- 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.
- Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
- Jones-Lee, M W, 1991. "Altruism and the Value of Other People's Safety," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 213-19, April.
- Johansson, Per-Olov, 1994. "Altruism and the value of statistical life: Empirical implications," Journal of Health Economics, Elsevier, vol. 13(1), pages 111-118, March.
- Shogren, Jason F, 1990. "The Impact of Self-protection and Self-insurance on Individual Response to Risk," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 191-204, June.
- 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.
- Jorge E. Araña & Carmelo J. León, 2002. "Willingness to pay for health risk reduction in the context of altruism," Health Economics, John Wiley & Sons, Ltd., vol. 11(7), pages 623-635.
When requesting a correction, please mention this item's handle: RePEc:hhs:oruesi:2007_002. 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: ()
If references are entirely missing, you can add them using this form.