Document Type
Article
Publication Title
Environmental and Resource Economics
Publication Date
10-2011
ISSN
0924-6460
Page Number
23
Keywords
morbidity risks, drinking water, gastrointestinal illness
Disciplines
Environmental Law | Law
Abstract
This paper reports the stated preference values for reducing the morbidity risks from drinking water estimated using a nationally representative U.S. sample of 3,585 households. Based on the average annual gastrointestinal (GI) illness risk in the U.S. from drinking water of about 5 illnesses per 100 population, eliminating the GI risk has a median annual value per household of $219. The considerable heterogeneity in the values arises largely from differences in attitudes towards risk and price sensitivity. Using interval regressions, we find that valuations are greater for those who perceive a high personal risk, consume a large quantity of tap water, or are environmentalists. The paper explores several methodological issues pertaining to the iterative choice format involving a choice between two policies characterized by their cost and GI risk. The analysis adjusts for starting point effects by basing valuations on the tradeoffs that are estimated to prevail at the “equitable tradeoff rate,” which is the starting cost-water quality tradeoff rate that produces a 50–50 split in the initial policy choice between policies with greater tradeoff rates and policies with lower tradeoff rates. The heterogeneity in valuations is also explored by examining quantile regression results and the determinants of the unbounded valuation amounts at the low and high extremes.
Recommended Citation
W. Kip Viscusi, Joel Huber, and Jason Bell,
Heterogeneity in Values of Morbidity Risks from Drinking Water, 52 Environmental and Resource Economics. 23
(2011)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1568