Family Decision Making and the Value of Preventing Childhood Developmental ImpairmentEPA Grant Number: R830822
Title: Family Decision Making and the Value of Preventing Childhood Developmental Impairment
Investigators: Krupnick, Alan J. , Adamowicz, Wiktor , Bostrom, Ann , Hoffmann, Sandra
Institution: Resources for the Future , Georgia Institute of Technology , University of Alberta
EPA Project Officer: Hahn, Intaek
Project Period: September 1, 2003 through August 31, 2007 (Extended to August 31, 2008)
Project Amount: $344,698
RFA: Valuation of Environmental Impacts on Children's Health (2002) RFA Text | Recipients Lists
Research Category: Health Effects , Children's Health , Health , Economics and Decision Sciences
This multi-disciplinary study has three objectives: (1) to provide more comprehensive valuation of reducing risk of childhood developmental impairment neurotoxins by estimating parental willingness to pay (WTP) to reduce lead-paint hazards to their children; (2) to develop more accurate methods of eliciting parental WTP to protect children's health by testing the impacts of using intra-household resource allocation models rather than unitary household models; and (3) to develop more systematic approaches to designing non-market survey instruments by using mental models research to better understand the underlying decision processes.
Current research on parental WTP to protect children's health from environmental hazards models household choice as an action by a single decision-maker with a unitary utility function and a pooled budget. A large body of literature in economics and sociology of the family and in cognitive psychology suggests that these assumptions are flawed and may lead to incorrect measures of parental WTP to protect children's health from environmental hazards. In particular, past research suggests that bargaining models of parental choice with incompletely pooled budgets may more accurately represent typical household behavior. The study proposed here tests these assumptions.
These issues are of particular concern in the area of children's health where individual parents may have different attitudes toward children's health risks, be affected differently by children's illnesses, and have responsibility for different parts of the household budget. Cognitive psychology studies show fairly consistently that women are more risk averse than men with regard to health and safety risks. If this were coupled with women having greater responsibility for child care or greater responsibility for expenditures affecting children's health, current valuation methods which do not take this into account could result in inaccurate estimates of parental willingness to pay to protect children from environmental health hazards.
This study focuses on parental willingness to pay to protect children from environmental neurotoxins. Environmental neurotoxins can have permanent effects on children's intelligence, motor development, and attention. New research suggests that environmental exposure may be a larger contributor to developmental impairment than previously thought. Lead paint exposure will be used as the representative neurotoxin hazard. Lead paint abatement options provide an excellent vehicle for testing unitary versus bargaining household models in estimating parental WTP to protect children’s health. EPA currently relies on more limited cost-of-illness and human capital estimates of the benefits of protecting children from lead and other neurotoxin hazards.
This study has two phases. The first phase will elicit "mental maps" of parents' risk perceptions and decision making about reducing their children’s health risks from lead paint. Thirty couples will be interviewed individually and as a couple about their risk perceptions, definitions of the decision problem and choice set, and roles in family decision making. Results from phase one will guide development in phase two of an attributed-based/conjoint contingent-behavior survey of 250 couples to assess the influence of individual and shared parental risk perceptions and preferences on household choice of lead-paint abatement to protect children.
This research will produce estimates of individual and household willingness to pay for reduced risk of developmental impairment in children. It will also generate measures of the degree to which estimates from bargaining and unitary household models differ. Insights into household decision-making affecting environmental health risks drawn from the valuation and mental model results will help guide future environmental health valuation efforts as well as neurotoxin risk communication programs.