Estimates of the willingness to pay (WTP) for a mortality risk reduction can be used to calculate the value of a statistical life, which is a major component in many economic evaluations of environmental and safety policies. Previous research on the WTP for risk reductions using stated preference methods have found that the mean WTP for public risk reductions is significantly smaller compared to the mean WTP for private risk reductions of equal magnitude. Hence, the use of a private or public scenario in stated preference studies of e.g. environmental or safety policies may strongly determine the outcome of the economic evaluation. In this paper we use a stated preference survey to show that WTP for a private risk reduction is three times higher compared to a public risk reduction and a significant part of the difference can be explained by respondents' attitudes towards privately and publicly provided goods in general. (A) Reprinted with permission from Elsevier.
Abstract