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Effects of Disease Type and Latency on the Value of Mortality Risk

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  • Jin-Tan Liu
  • James K. Hammitt

Abstract

We evaluate the effects of disease type and latency on willingness to pay (WTP) to reduce environmental risks of chronic, degenerative disease. Using contingent-valuation data collected from approximately 1,200 respondents in Taiwan, we find that WTP declines with latency between exposure to environmental contaminants and manifestation of any resulting disease, at a 1.5 percent annual rate for a 20 year latency period. WTP to reduce the risk of cancer is estimated to be about one-third larger than WTP to reduce risk of a similar chronic, degenerative disease. The value of risk reduction also depends on the affected organ, environmental pathway, or payment mechanism: estimated WTP to reduce the risk of lung disease due to industrial air pollution is twice as large as WTP to reduce the risk of liver disease due to contaminated drinking water.

Suggested Citation

  • Jin-Tan Liu & James K. Hammitt, 2003. "Effects of Disease Type and Latency on the Value of Mortality Risk," NBER Working Papers 10012, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10012
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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection

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