Monetary Valuation of Air Pollution Mortality: Current Practice, Research Needs and Lessons from a Contingent Valuation
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The current situation of the monetary valuation of air pollution mortality is reviewed, with particular attention to the valuation of a gain in life expectancy (LE) achievable by a reduction of ambient pollution. This paper presents exploratory research centered around the application in France of a contingent valuation (CV) questionnaire developed by Krupnick et al [2002] which has been applied in the USA, Canada, Japan, and more recently in France, Italy and the UK. The original version was administered to 300 individuals, but by contrast to the application elsewhere, in France an open question was added after each set of bids and at the end of the questionnaire the WTPs (willingness-to-pay) were recalled to give the respondents the opportunity to correct their values. In addition several variants were tested on samples of about 50 each, including variants phrased in terms of LE gain. All the interviews (self-administered with a computer) were followed by written debriefing, and for the LE gain variants by face-to-face debriefing and discussions in groups of three or four, in order to better understand the perception of the questionnaire and the reasons for the responses. The results are used to provide estimates for the value of statistical life (VSL) and for the value of a life year (VOLY): they range from 0.4 to 4.1 M€ for VSL and from 0.021 to 0.206 M€ for VOLY. The WTP for a risk reduction between the ages of 70 and 80 yields a time preference rate of about 2% for mortality. However, the most important results are not the numbers but the lessons learned by debriefing and by the variants of the questionnaire. The wide scatter of the results is a reflection of the enormous difficulties that the respondents have in understanding risk reductions and replying to the WTP (willingness-to-pay) question. Thanks to the open question it was possible to measure the bias due to the starting bid: it is very large, on the order of 50% for the bids that were used. Thus the recommendation of the NOAA Panel on contingent valuation, that only the closed question should be used, is not appropriate for small risk reductions.Keywords:
Contingent valuation
Debriefing
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In contingent valuation studies to assess the economic value of environmental goods, respondents are often given small presents or money amounts at the beginning of the interview to compensate them for their time spent on the survey and to encourage them to be conscientious when answering the questions. Yet, it is still an open question whether this practice biases contingent valuation survey responses, especially stated willingness to pay (WTP) for the respective environmental good. This study employs a set of field experiments to investigate the effect of respondent incentives in the form of monetary and in-kind gifts on responses in a contingent valuation survey. It is analysed how these different kinds of incentives affect (1) respondents' diligence when answering contingent valuation method questions, (2) the likelihood of a respondent to state a positive WTP and (3) the amount of stated WTP. Results show that with respect to raising respondents' diligence in the survey interview, a moderate monetary incentive is most effective. The results regarding the effect on WTP statements are less clear. While the likelihood to state a positive WTP is increased by most incentives, mean WTP estimates are virtually unaffected.
Contingent valuation
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Contingent valuation
Tobit model
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In this paper we use data from an internet-based survey and estimate the benefits of an oyster consumption safety policy with the contingent valuation method. In addition to providing a context specific estimate of willingness-to-pay for oyster safety, we consider two unresolved issues in the contingent valuation health risk literature. First, a number of studies in the mortality risk reduction literature find that willingness-to-pay is not sensitive to the scope of the risk change. We present the scope test as a difference in the number of lives saved by the program, instead of small changes in risk, and that referendum votes are responsive to scope. Second, we identify those at risk respondents who would actually benefit from the policy and decompose willingness-to-pay into personal mortality risk reduction values and altruistic willingness-to-pay. We find that respondents are sensitive to the scope of the policy and most at-risk respondents are willing to pay even more. We find that willingness-to-pay per life saved is $1.28 million for the pure private good of own-risk reduction. Willingness-to-per per life saved including private values and public, altruistic nonuse values is $5.92 million. Altruistic values are the major component of willingness-to-pay. Key Words: contingent valuation, scope test, altruism, seafood safety, health risk, oyster
Contingent valuation
Private good
Scope (computer science)
Consumption
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The authors examine a number of ways in which willingness to pay (WTP) can be defined for measurement and use in a cost-benefit analysis (CBA) of a collectively funded health care program. They show how ambiguous specification of the program consequences that respondents should consider in their WTP responses can lead to problems of double counting or zero countingin a subsequent CBA. An example is whether the value of lost time from work because of poor health should be included by a CBA analyst (e.g., valued at the wage rate) as a separate cost item or whether this has already been monetized and included in respondents' WTP data. The authors highlight how differences in assumed or actual institutional structures are often ignored in measures of WTP and the consequences of this for the interpretation of WTP data.
Contingent valuation
Value (mathematics)
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Contingent valuation
EQ-5D
Scope (computer science)
Economic Evaluation
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Internet is an increasingly popular data collection mode for stated preference research in environmental economics. However, little is known about how this survey mode may influence data quality and welfare estimates. As part of a national contingent valuation (CV) survey estimating willingness to pay (WTP) for biodiversity protection plans, we assign two groups of respondents either to an Internet or face-to-face (in-home) interview mode. Our design aims to better isolate measurement effects from sample composition effects by drawing both samples from the same sample frame. We find little evidence of social desirability bias in the interview setting or satisficing (shortcutting the response process) in the Internet survey. The share of "don't knows", zeros and protest responses to the WTP question with a payment card is very similar between modes and equality of mean WTP cannot be rejected. Results are fairly encouraging for the use of Internet in CV as stated preferences do not seem to be significantly different or biased compared to face-to-face interviews.
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Contingent valuation
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This paper compares the value per statistical life (VSL) in the context of suicide prevention to that of prevention of traffic fatalities. We conducted a contingent valuation survey with questions on willingness to pay (WTP) in both contexts by administering a web questionnaire to 1038 individuals aged 18 to 80. We conjectured that WTP for a given impact on the number of fatalities would be lower for suicide prevention because suicide, at least to some degree, is the result of individuals’ own decisions. However, this hypothesis was not supported by the within- or between-sample estimates of VSL or by responses to direct questions. Hence, no support is provided for the use of a lower valuation of the impact of suicide prevention than for risk-reducing programs in other fields, such as traffic safety.
Contingent valuation
Sample (material)
Value of life
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