Sensitivity of willingness to pay to the magnitude of risk reduction: a Taiwan­United States comparison

Sensitivity of willingness to pay to the magnitude of risk reduction: a Taiwan­United States comparison
Posted on February 1, 2010
Authors: Hammitt James K., Jin-Tan Liu
Journal of Risk Research 2000 3(4): -  PubmedID: 4846547   ISSN/ISBN: 13669877
Estimates of willingness to pay (WTP) for health, environmental, and other goods obtained using contingent valuation (CV) have been criticized as inadequately sensitive to the scope or magnitude of the good. We investigate the sensitivity of WTP to variation in the magnitude of reductions in health risk using survey data collected in two countries, Taiwan and the United States, that differ dramatically with respect to economic development and cultural background. WTP is elicited for reductions in acute risks associated with food poisoning and blood transfusion, and for reductions in the chronic risk of pneumonia at advanced ages. Results are similar in the two countries and provide little evidence that CV-based estimates are sufficiently sensitive to the magnitude of the risk reduction. Inadequate sensitivity of estimated WTP to the magnitude of risk reduction suggests that improved methods are required for estimating consumers' rates of substitution between health risk and other goods. [ABSTRACT FROM AUTHOR]; Copyright of Journal of Risk Research is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)