The Valuation of Mortality Risk Reductions: Application of Two New Survey Instruments

EPA Grant Number: R826608
Title: The Valuation of Mortality Risk Reductions: Application of Two New Survey Instruments
Investigators: Krupnick, Alan J. , Alberini, Anna , Belli, Robert , Cropper, Maureen
Current Investigators: Krupnick, Alan J. , Alberini, Anna , Cropper, Maureen , Simon, Nathalie
Institution: Resources for the Future , University of Colorado at Boulder , University of Maryland and World Bank , University of Michigan
Current Institution: Resources for the Future
EPA Project Officer: Lee, Sonja
Project Period: October 1, 1998 through September 30, 2000
Project Amount: $270,000
RFA: Decision-Making and Valuation for Environmental Policy (1998) RFA Text |  Recipients Lists
Research Category: Economics and Decision Sciences

Description:

Objectives/Hypotheses: Our major objectives are two-fold: (i) to develop and test methods for estimating WTP for mortality risk reductions over a person's life cycle (particularly later in life); and (ii) to provide the policy community with credible estimates for use in benefits assessments. No estimates of this type currently exist for the U.S. To evaluate whether we have been successful in obtaining reliable estimates of willingness to pay, we will subject our results to both internal and external scope tests, examining, at a minimum, the following hypotheses drawn from the theoretical literature: (i) WTP should increase proportionally with the risk reduction; (ii) the farther into the future the change in risk (life expectancy) occurs, the lower is WTP for the change today; (iii) WTP for a current risk change should be a hump-shaped function of age, increasing with age over some interval, but eventually decreasing; (iv) the worse a person's health is today, the less his WTP for a current risk change should be.

Approach:

We will use the dichotomous-choice, contingent valuation approach to administer in person one of two alternative instruments to a sample of 2,000 adults (oversampling older adults). One asks people to value a change in their probability of dying (the mortality risk approach). The other asks people to value the same risk change, stated in terms of a change in life expectancy. We will depart from past procedures by asking people to value changes in their risk of dying over the next ten years and between the ages of 70 and 80, i.e., we will use 10-year rather than 1-year intervals. In addition, we will use visual aids and other methods to engage respondents in thinking about their mortality risks and the costly steps they take every day to reduce such risks. This project will build upon almost-completed research that develops and pre-tests these instruments, funded primarily by a previous grant from the EPA/NSF Partnership. This proposal asks for funding to finish pre-testing the life expectancy instrument and to conduct and analyze the results of the survey to be conducted in Maryland and another state.

Expected Results:

Our work shouldprovide future research efforts with insights into (1) effective communication ofsmall probabilities and changes in life expectancies and (2) the effect of using visual aids and engaging individuals in complex tasks on the consistency of their WTP responses. For policymakers, the successful conclusion of our research will mean the availability of credible estimates of the WTP for reductions in mortality risks enjoyed primarily later in life. The improvement in risk management accorded by such estimates follows directly.

Publications and Presentations:

Publications have been submitted on this project: View all 30 publications for this project

Journal Articles:

Journal Articles have been submitted on this project: View all 2 journal articles for this project

Supplemental Keywords:

valuation, RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Health, PHYSICAL ASPECTS, Geographic Area, Health Risk Assessment, State, Risk Assessments, Physical Processes, decision-making, Ecology and Ecosystems, Economics & Decision Making, Social Science, ecosystem valuation, contingent valuation, social psychology, dichotomous-choice, exposure, decision analysis, life expectancy, valuation of mortality, valuing environmental quality, economic incentives, environmental values, morbidity risks, human exposure, environmental policy, Maryland (MD), psychological attitudes, compliance costs, mortality, mortality risks, willingness to pay, human health risk, economic objectives

Progress and Final Reports:

  • 1999 Progress Report
  • Final Report