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EFFECTS OF A TRANSIENT CANCER SCARE ON PROPERTY VALUES: IMPLICATIONS FOR RISK VALUATION AND THE VALUE OF LIFE. (R825173)
Citation:
Gertler, N. AND A. C. Cullen. EFFECTS OF A TRANSIENT CANCER SCARE ON PROPERTY VALUES: IMPLICATIONS FOR RISK VALUATION AND THE VALUE OF LIFE. (R825173). HUMAN AND ECOLOGICAL RISK ASSESSMENT. Elsevier Science Ltd, New York, NY, 6(5):731-745, (2000).
Description:
Abstract
A transient cancer scare is presented as a rare opportunity to observe the effect of a perceived increase in risk on the price of residential property. The temporary nature of the perceived excess risk allows for the isolation of a risk premium from the change in housing prices, because prices decline during this natural experiment and return to normal when the cancer scare is proven to be unfounded. Value of life measures imputed from this risk premium are orders of magnitude lower than similar values obtained by studies involving other risk-dollar tradeoffs. The likelihood of death which is taken to be valued by the risk premium is much greater in this case than in other value-of-life studies, giving support to the notion that the aversion to risk is not directly proportional to the probability of harm.
Author Keywords: Risk Perception; Risk Premium; Value-of-Life