A ?Natural Experiment? Approach to Contingent Valuation of Private and Public UV Health Risk Reduction Strategies in Low and High Risk Countries

Abstract

We present the results of a 'natural experiment' to test how variations in exogenous risk levels affect resultant willingness to pay (WTP) for risk reduction. The case study presented considers WTP for reductions in the skin cancer risks associated with exposure to solar UV radiation. A common design contingent valuation survey is conducted in four countries, across which variation in geographical latitude and genetic mix mean that exogenous risks differ substantially. Survey respondents were presented with both a private and public good route for affecting risk reduction. In both cases, results confirm that once adjustment had been made for expected relationships with other covariates (such as income and risk averting behaviour), valuation responses for both goods conformed to expectations with the ordering of values across countries reflecting the ordering of scientifically established health risks. This suggests that links between values and objective health risks may be observed within such situations and provides a justification for continuing research into more natural representations of risk and risk reductions in order to yield consistent and robust measures of associated values.

Nonmarket valuation of water quality in a rural transition economy in Turkey applying an a posteriori bid design

“…Both models explain the probability that a respondent says ''yes'' to the WTP question. As expected and corresponding with previous findings in the literature [e.g., Bateman et al, 2005], there is significant positive anchoring of stated WTP on the current price paid for the good in question. Given the applied elicitation procedure in this study, the current water bill and bid level are obviously highly correlated (r = 0.675; p < 0.01), causing multicollinearity.…”

“…On the basis of previous experiences [e.g., Green et al, 1998;Bateman et al, 2005], we expected to find some degree of procedural anchoring bias in our WTP model given the most appropriate institutional mode of payment in our case study. Although perhaps partly invalidating our utility maximization model, we argue that the decision to use the alternative, unconventional elicitation procedure here is based on a studied trade-off between incentive compatibility on the one hand and procedural anchoring bias on the other in DC CV research.…”

“A convenient truth”: air travel passengers’ willingness to pay to offset their CO2 emissions

“…Mitchell and Carson 1989;Bateman et al 2005), significant positive anchoring is found of stated WTP on the start bid and the current price travellers pay for their airplane ticket. The higher the start bid or the airfare, the higher the likelihood of falling in a higher ordered bid interval.…”

Modelling risk adaptation and mitigation behaviour under different climate change scenarios

“…They depend on personal experiences, the extent to which the risk is regarded as voluntary, under individual control and responsibility, familiar and well-understood (Wilson 1991;Beattie et al 1998). In addition, theory tells us that WTP for a reduction in risk exposure depends on (i) the realised level of risk, which is determined by exogenous risk and self-protection activities, (ii) individual characteristics such as disposable income to protect oneself against risk, and (iii) an individual's disutility from risk exposure or risk aversion (Shogren and Crocker 1991;Bateman et al 2005). These factors were controlled for as much as possible in the choice experiment and estimated choice models presented here through the inclusion of a wide variety of related questions in the survey about individual respondents' risk awareness, knowledge, perception, attitudes and protection measures.…”