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Valuation of Risks to Human Health: Insensitivity to Magnitude?

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Contingent valuation (CV) is a popular but controversial method for estimating economic values of non-market goods. By relying on stated preferences with respect to hypothetical choices, CV can be applied to a broad range of economic goods. However, there is doubt about the accuracy with which CV studies estimate economic values, in part because estimated values can appear to be inconsistent with economic theory.

One of the most significant violations of theory is the apparently inadequate sensitivity of CV-estimated willingness to pay (WTP) to the magnitude or scope of the good offered. Such violations have been found for both environmental quality and individual health risk.

The objectives of the proposed research are to: 1) determine whether (and to what extent) insensitivity to magnitude variation is a barrier to eliciting valid estimates of WTP for reduction of risks to human health; 2) develop and test tools for the CV practitioner that enhance respondent understanding of the nature and magnitude of the health risk reduction to be offered; 3) perform rigorous, external (split sample) tests of tools designed to address the problem of insensitivity to magnitude variation; and 4) offer constructive guidance to CV practitioners, based on results from the proposed research and the existing literature, on what steps can be taken in the design of CV-health studies to reduce the problem of insensitivity to magnitude variation.

The research will include development, pilot testing, administration, and analysis of two surveys, one administered by telephone, the other a mixed telephone/mail survey. In the mixed format, subjects are initially contacted by telephone. Those who agree to participate in the study provide a mailing address to which materials are sent and arrange a time for a subsequent telephone interview during which the survey is administered.

Both surveys will include elicit WTP for health-risk reductions in a variety of contexts, e.g., traffic safety, food contamination, blood transfusion. Subsamples will be presented with different quantities of risk reduction, allowing a comparison of WTP with the magnitude of the reduction. In some cases, an alternative format will be employed in which the price of the intervention is specified and the risk reduction respondents would demand for that price is elicited; for this format, the sensitivity of indifference risk to price will be evaluated.

A range of risk-communication tools will be tested in both the telephone and the mixed telephone/mail survey. These will include tools that have been used in prior CV work (e.g., risk ladders, graph paper with a number of colored squares proportional to the risk) and verbal probability analogies (e.g., minutes in a year, empty seats in a football stadium). The tools will be presented in split samples. Their efficacy will be evaluated by whether they increase the consistency between estimated WTP and predictions of economic theory, and by respondents' reported evaluation of the helpfulness of the tools in improving their understanding of the risk and other criteria.

Metadata

EPA/NSF ID:
R825312-01
Principal Investigators:
Hammitt, James K.
Graham, John
Hanemann, Michael
Technical Liaison:
Research Organization:
Harvard University
California at Berkeley, University of
Funding Agency/Program:
EPA/ORD/Valuation
Grant Year:
1996
Project Period:
October 15, 1996 - October 14, 1999
Cost to Funding Agency:
$377,584
Project Status Reports:
From Proceedings of April 2-3, 1998 NSF/EPA Workshop:

The validity of contingent-valuation (CV) based estimates of willingness to pay (WTP) have been criticized on the basis that estimated WTP is not sufficiently sensitive to the magnitude of the good being valued. In contrast to other contexts, where the WTP for different quantities of a good often should be less than proportional to the quantity offered, conventional economic theory predicts that WTP for reductions in period-mortality risk should be proportional to the magnitude of the risk increment (except for a small income effect). This project’s goals are to: (1) deter- mine the extent to which inadequate sensitivity to mag- nitude is a barrier to eliciting valid estimates of WTP for reduction of risks to human health, and (2) develop and test (using split samples) alternative methods for communicating risks that may promote consistency between empirical and theoretical estimates of WTP.

A series of CV studies of WTP for reductions in health risk are being undertaken. These studies differ in the format (i.e., telephone vs. telephone/mail/tele- phone vs. in-person), the health risks presented (e.g., automobile accident, food-borne illness, blood transfu-sion), and the materials used to describe changes in health risks.


A series of verbal “probability analogies” were developed for use in telephone surveys. Focus groups and pilot tests were used to identify the most promising analogies, which were subsequently tested in a split- sample telephone survey. Visual risk communication devices (i.e., risk ladders, colored graph paper) are cur- rently in development and will be tested using in-person and telephone/mail/telephone surveys. Risk-communication materials are evaluated by the extent to which they facilitate or impede obtaining estimated values that are consistent with theoretical predictions of the sensitivity of WTP to the magnitude of risk reduction.

This project’s results reflect substantial variation between topics and details of the elicitation process. In telephone interviews, statistically significant differences were found consistently in WTP for automobile accident risk using an alternative elicitation format (in which the risk reduction required for a specified cost increment is elicited) instead of the conventional format. No differ- ence was found in WTP to reduce the risk of food con- tamination, despite an order-of-magnitude difference in the risk. A comparison of WTP for qualitatively dif- ferent risks of viral infection transmitted by blood trans- fusion indicates some sensitivity to risk magnitude. In all three risk contexts, use of the probability analogies to convey risk had a modest effect on improving the consistency of estimated and theoretical sensitivity to scope. Initial results suggest that verbal communication of small risk changes is challenging and casts some doubt on the validity of prior studies that elicited values for risk reduction using verbal descriptions.


Materials are being developed for a mixed tele- phone/mail/telephone format survey. This format will allow us to use visual aids for communicating risk mag- nitudes to respondents. In contrast to the limited means of communicating risks that are available in a telephone survey, these visual materials may lead to improved respondent understanding of the specific risk changes and greater consistency of estimated WTP with theoretical expectations.


From previous status report:
Objectives of Research

The objectives of the proposed research are to:
  • Determine whether (and to what extent) insensitivity to magnitude variation is a barrier to eliciting valid estimates of WTP for reduction of risks to human health;
  • Develop and test tools for the CV practitioner that enhance respondent understanding of the nature and magnitude of the health risk reduction to be offered;
  • Perform rigorous, external (split sample) tests of tools designed to address the problem of insensitivity to magnitude variation; and
  • Offer constructive guidance to CV practitioners, based on results from the proposed research and the existing literature, on what steps can be taken in the design of CV-health studies to reduce the problem of insensitivity to magnitude variation.

    Progress Summary

    We have conducted two nationwide random-digit-dial telephone surveys with approximately 1,000 respondents each. In the first survey, WTP for an automobile safety device that would reduce mortality risk from vehicle accidents was elicited using standard double-bounded dichotomous-choice questions. In the second survey, WTP was elicited for reductions in risks associated with automobile accidents, bacterial food contamination, and blood transfusion. In each case, subsets of respondents were presented with different numerical magnitudes of risk reduction, allowing split-sample estimation of sensitivity to scope.
    The second survey tested several methodological alternatives including probability analogies and a "dual-format" elicitation approach. Probablity analogies were developed to assist respondents in understanding the magnitude of the specified risk reductions. We considered the use of several analogies (e.g., minutes in a year, inches in a mile, empty seats in a football stadium). In the second survey, half the respondents were asked to rate the helpfulness of these alternative analogies in understanding probabilities. In addition, this same half of the sample was presented with a minutes per year analogy for each risk that was valued (e.g., for the automobile risks, a baseline 20/100,000 risk is described as "like 105 minutes in a year"); this analogy was shown by our focus group and pilot tests to be most helpful.


    A second methodological refinement we tested is the "dual-format" elicitation. Under the standard CV approach, WTP for a specific good (i.e., magnitude of risk reduction) is elicited. In the dual approach, we estimate the magnitude of the good for which respondents' WTP equals a pre-specified amount. That is, we estimate the "indifference risk," or risk reduction offered such that the respondent would be indifferent between purchasing it and not (at the specified price), and test whether the indifference risk is sensitive to changes in the price of the good.

    Research Results

    Our results reflect substantial variation between topics and details of the elicitation process. In the automobile context, we consistently found statistically significant differences in WTP using the dual-format approach but not using the conventional format. Results were similar using both external (between respondent) and internal (within respondent) comparisons. We found no difference in WTP to reduce the risk of food contamination, despite an order-of-magnitude variation in the probability increment. This lack of sensitivity differs from the approximate two-fold difference in WTP obtained by Hayes et al. (1995) in an experimental, repeated-auction setting.


    Comparison of WTP for qualitatively different risks of viral infection transmitted by blood transfusion indicate some sensitivity to scope of the risk. The results differ between cases using WTP for the hepatitis test alone, or WTP for the hepatitis test conditional on the hospital screening for HIV. The adding-up test is violated when the hepatitis-virus test is conditioned on the hospital testing for HIV, but not when the hepatitis-virus test is offered alone.

    In all three risk contexts, use of the probability analogies to convey risk had modest effect on improving the consistency of estimated and theoretical sensitivity to scope.

    Publications/Presentations

    A manuscript entitled "Willingness to Pay for Health: Are Stated Values Responsive to Scope?" has been submitted for publication. Abstracts for presentation of this work have been accepted for the following conferences:


    Society for Risk Analysis, Washington, D.C., December 8-10, 1997.
    American Economic Association/Association of Environmental and Resource Economists, Chicago, January 3-5, 1998.

    Future Activities

    We are currently developing materials for a mixed telephone/mail/telephone format survey. This format will allow us to use visual aids for communicating risk magnitudes to respondents. In contrast to the limited means of communicating risks that are available in a telephone survey, these visual materials may lead to improved understanding of the specific risk changes and greater consistency of estimated WTP with theoretical expectations.


    For the year 1998
    Objective:
    • Determine whether (and to what extent) insensitivity to magnitude variation is a barrier to eliciting valid estimates of WTP for reduction of risks to human health;
    • Develop and test tools for the CV practitioner that enhance respondent understanding of the nature and magnitude of the health risk reduction to be offered;
    • Perform rigorous, external (split sample) tests of tools designed to address the problem of insensitivity to magnitude variation; and
    • Offer constructive guidance to CV practitioners, based on results from the proposed research and the existing literature, on what steps can be taken in the design of CV-health studies to reduce the problem of insensitivity to magnitude variation.

    Progress Summary:

    We have conducted two nationwide random-digit-dial telephone surveys with approximately 1,000 respondents each. A third survey, using a telephone-mail-telephone format is currently in the field.

    In the first survey, WTP for an automobile safety device that would reduce mortality risk from vehicle accidents was elicited using standard double-bounded dichotomous-choice questions. In the second survey, WTP was elicited for reductions in risks associated with automobile accidents, bacterial food contamination, and blood transfusion. In each case, subsets of respondents were presented with different numerical magnitudes of risk reduction, allowing split-sample estimation of sensitivity to scope. In the second survey, half the respondents were asked to rate the helpfulness of alternative analogies in understanding probabilities (e.g., minutes in a year, inches in a mile, empty seats in a football stadium) and were presented with a minutes per year analogy for each risk (e.g., a 20/100,000 risk is like 105 minutes in a year). In addition, we tested an "indifference- risk" elicitation method in which respondents are asked how large a risk reduction would be required for them to purchase a safety device at a stated price.

    Our results reflect substantial variation between topics and details of the elicitation process, with some variations yielding results that are consistent with the theoretically prescribed proportionality between WTP and probability change. In the automobile context, we consistently find statistically significant differences in WTP using the indifference-risk approach (eliciting indifference risk reductions for specified prices in the second survey) but not using the conventional format (eliciting WTP for specified risk changes in the first survey). Similar conclusions are obtained using both external (between subsample) and internal (within subsample) comparisons. In the indifference- risk elicitation, estimates based on the subsample of respondents indicating high confidence in their answers are roughly proportional to the price difference; estimates based on less-confident respondents are alternatively inadequately and excessively sensitive to the price difference. We found no difference in WTP to reduce the risk of food contamination, despite an order-of-magnitude variation in the probability increment.

    The telephone-mail-telephone survey that is currently in the field includes visual aids to communicate the magnitude of risk reductions. These include a field of 25,000 dots of which the appropriate number are colored, linear and logarithmic risk ladders. The visual aids are randomly assigned to subsamples of respondents and we will investigate whether sensitivity of WTP to risk reduction differs among subsamples.

    Future Activities: Data from the telephone-mail-telephone survey will be available in spring 1999. We will analyze these data in order to determine whether alternative visual aids enhance the sensitivity of elicited WTP to the magnitude of risk reduction.

    Publications and Presentations: Total Count: 3

    J.K. Hammitt and J.D. Graham, "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?" Journal of Risk and Uncertainty, in press.
    "Willingness to Pay for Health Protection: Sensitivity to Risk," American Economics Association/Association of Environmental and Resource Economists, Chicago, January 1998.
    J.K. Hammitt and J.D. Graham, "The Economic Value of Reducing Health Risks: Risk Perception, Communication, and Contingent Valuation," Proceedings of the Society for Risk Analysis-Europe Annual Meeting, Paris, 1998.

    Supplemental Keywords: Economic, Social, & Behavioral Science Research Program, RFA, Scientific Discipline, Ecology and Ecosystems, Economics & Decision Making, Health Risk Assessment, decision-making, contingent valuation, cost benefit, decision analysis, economic benefits, ecosystem valuation, environmental policy, environmental values, human health risk, interviews, magnitude variation, policy analysis, preference formation, psychological attitudes, public policy, public values, risk preferences, social psychology, standards of value, stated preference, surveys, valuation, valuing environmental quality

    For the year 1999

    Objective:

    The objectives of the research project are to:

    • Determine whether (and to what extent) insensitivity to magnitude variation is a barrier to eliciting valid estimates of willingness to pay (WTP) for reduction of risks to human health;
    • Develop and test tools for the CV practitioner that enhance respondent understanding of the nature and magnitude of the health risk reduction to be offered;
    • Perform rigorous, external (split sample) tests of tools designed to address the problem of insensitivity to magnitude variation; and
    • Offer constructive guidance to CV practitioners, based on results from the proposed research and the existing literature, on what steps can be taken in the design of CV health studies to reduce the problem of insensitivity to magnitude variation.

    Progress Summary:

    We have conducted two nationwide random-digit-dial telephone surveys with approximately 1,000 respondents each. A third survey used a telephone-mail-telephone format to test the effect of different visual aids.

    In the first survey, WTP for an automobile safety device that would reduce mortality risk from vehicle accidents was elicited using standard double-bounded dichotomous-choice questions. In the second survey, WTP was elicited for reductions in risks associated with automobile accidents, bacterial food contamination, and blood transfusion. In the third survey, WTP was elicited for reductions in risks associated with automobile accidents, blood transfusion, and pneumonia at advanced ages.

    In each case, subsets of respondents were presented with different numerical magnitudes of risk reduction, allowing split-sample estimation of sensitivity to scope. In the second survey, half the respondents were asked to rate the helpfulness of alternative analogies in understanding probabilities (e.g., minutes in a year, inches in a mile, empty seats in a football stadium), and were presented with a minutes per year analogy for each risk (e.g., a 20/100,000 risk is like 105 minutes in a year). In addition, we tested an "indifference-risk" elicitation method in which respondents are asked how large a risk reduction would be required for them to purchase a safety device at a stated price. In the third survey, respondents were randomly assigned to one of three treatment groups or a control group. Respondents in each treatment group were presented with one of three visual aids used to communicate the risk reductions: a logarithmic risk ladder, a hierarchical linear risk ladder, and a page with 25,000 dots. These visual aids were based on risk communication aids previously used in contingent valuation.

    Our results reflect substantial variation between topics and details of the elicitation process, with some variations yielding results that are consistent with the theoretically prescribed proportionality between WTP and probability change. With respect to the pure telephone surveys (no visual aids), in the automobile context, we consistently find statistically significant differences in WTP using the indifference-risk approach (eliciting indifference risk reductions for specified prices in the second survey), but not using the conventional format (eliciting WTP for specified risk changes in the first survey). Similar conclusions are obtained using both external (between subsample) and internal (within subsample) comparisons. In the indifference-risk elicitation, estimates based on the subsample of respondents indicating high confidence in their answers are roughly proportional to the price difference; estimates based on less-confident respondents are alternatively inadequately and excessively sensitive to the price difference. We found no difference in WTP to reduce the risk of food contamination, despite an order-of-magnitude variation in the probability increment.

    The telephone-mail-telephone survey revealed substantial differences in sensitivity of WTP to magnitude of risk reduction depending on the visual aid used. We find that WTP depends on the magnitude of risk reduction for three groups of respondents presented with alternative visual aids, but not for the subsample that did not receive any visual aid. Estimated WTP is consistent with the theoretically predicted proportionality to risk change for the subgroups presented with a logarithmic scale or an array of 25,000 dots, but not for the subgroups receiving a linear scale or no visual aid. These results suggest that CV can provide valid estimates of WTP for mortality risk reduction if appropriate methods are used to communicate the risk change to respondents.

    In addition to the primary goals of this research, we included questions on the final survey to elicit respondents' preferences between lotteries on lifespan. By asking respondents to choose between lotteries having a common life expectancy but differences in risk (that is, one lottery second-order stochastically dominates the other), we can determine whether respondents act in a risk averse, risk seeking, or risk neutral manner with respect to each choice. Preliminary analysis of these results suggests people do not hold a constant risk posture across pairs of lotteries, but that their preferences depend on the life expectancy and other factors. This work was presented by Phaedra Corso at the 1999 Society for Medical Decision Making annual conference where it was awarded the Lee B. Lusted Student Prize for best research presentation by a student. A manuscript reporting this work is in preparation.

    Finally, with funding from the Chiang Chin-Kuo Foundation for International Scholarly Exchange (USA), we conducted similar CV studies in Taiwan to compare the sensitivity of estimated WTP to magnitude of risk reduction in the two societies. Without visual aids, we found a similar lack of sensitivity in the two populations. In addition to publications, this work has been reported at the NCERQA investigator conferences as well as at numerous professional conferences and university seminars, including presentations at the American Economics Association/Association of Environmental and Resource Economists conferences, the Society for Risk Analysis conferences, the National Bureau of Economic Research summer institute, and the Taipei International Conference on Health Economics.

    Future Activities: This reporting period ends with the grant; therefore, there are no future activities anticipated.

    Publications and Presentations: Total Count: 15

    Corso PS, Hammitt JK, Graham JD. Evaluating the effect of visual aids on willingness to pay for reductions in mortality risk. Journal of Risk and Uncertainty (submitted in October 1999).

    Hammitt JK, Liu J-T, Lin W-C. Sensitivity of willingness to pay to the magnitude of risk reduction: a Taiwan-United States comparison. J Risk and Uncertainty (submitted August 1999).

    Hammitt JK, Graham JD. Willingness to pay for health protection: inadequate sensitivity to probability? J Risk and Uncertainty 1999;18(1):33-62.

    The Economic Value of Reducing Health Risks: Risk Perception, Communication, and Contingent Valuation. Society for Risk Analysis?Europe Annual Meeting, Paris, October 1998.

    Willingness to Pay for Health Risk Reduction. Presented at the Society for Risk Analysis Meeting, Washington, DC, December 1997.

    Corso P, Hammitt JK. Attitudes toward uncertain longevity: are individual risk postures consistent? Presented at the Society for Medical Decision Making Annual Meeting, Reno, NV, October 1999.

    Hammit JK. Contingent valuation of health risks. Presented at the Tenth New England Statistics Symposium, Department of Mathematical Statistics, Worcester Polytechnic Institute, Worcester, MA, April 1996.

    Do Visual Aids Enhance the Sensitivity of CV-Estimated WTP for Reductions in Mortality Risk? To be presented at the American Economics Association/Association of Environmental and Resource Economists Conference, Boston, MA, January 2000.

    Do Visual Aids Enhance the Sensitivity of CV-Estimated WTP for Reductions in Mortality Risk? To be presented at the National Bureau of Economic Research, Summer Institute Workshop on Public Policy and the Environment, Cambridge, August 1999.

    Sensitivity of Willingness to Pay to the Magnitude of Risk Reduction: A Taiwan-United States Comparison. Presented at the Taipei International Conference on Health Economics, Institute of Economics, Academia Sinica, Taipei, March 1999.

    Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability? Presented at the Department of Agricultural and Resource Economics Meeting, University of Maryland, February 1999.

    Willingness to Pay for Health Protection: Sensitivity to Risk. Presented at the American Economics Association/Association of Environmental and Resource Economists Conference, Chicago, IL, January 1998.

    Willingness to Pay for Health Risk Reduction. Presented at the Department of Health Policy and Management, Harvard School of Public Health Meeting, Boston, MA, December 1997.

    Willingness to Pay for Health: Are Stated Values Responsive to Scope? Presented at the National Bureau of Economic Research, Summer Institute Workshop on Public Policy and the Environment, Cambridge, July 1996.

    Hammitt JK, Graham JD. The economic value of reducing health risks: risk perception, communication, and contingent valuation. Proceedings of the Society for Risk Analysis?Europe Annual Meeting, Paris, 1998.

    Supplemental Keywords: willingness to pay, contingent valuation, sensitivity to scope, risk communication, health risk. , Economic, Social, & Behavioral Science Research Program, RFA, Scientific Discipline, Ecology and Ecosystems, Economics & Decision Making, Health Risk Assessment, decision-making, contingent valuation, cost benefit, decision analysis, economic benefits, ecosystem valuation, environmental policy, environmental values, human health risk, interviews, magnitude variation, policy analysis, preference formation, psychological attitudes, public policy, public values, risk preferences, social psychology, standards of value, stated preference, surveys, valuation, valuing environmental quality

  • Project Reports:
    Final

    Objective: The objectives of this project were to: (1) determine whether (and to what extent) insensitivity to magnitude variation is a barrier to eliciting valid estimates of willingness to pay (WTP) for reduction of risks to human health; (2) develop and test tools for the contingent valuation (CV) practitioner that enhance respondent understanding of the nature and magnitude of the health risk reduction to be offered; (3) perform rigorous, external (split sample) tests of tools designed to address the problem of insensitivity to magnitude variation; and (4) offer constructive guidance to CV practitioners, based on results from the proposed research and the existing literature, on what steps can be taken in the design of CV-health studies to reduce the problem of insensitivity to magnitude variation.

    Summary/Accomplishments:
    We have conducted two nationwide random-digit-dial telephone surveys with approximately 1,000 respondents each. A third survey used a telephone-mail-telephone format to test the effect of different visual aids.

    In the first survey, WTP for an automobile safety device that would reduce mortality risk from vehicle accidents was elicited using standard double-bounded dichotomous-choice questions. In the second survey, WTP was elicited for reductions in risks associated with automobile accidents, bacterial food contamination, and blood transfusion. In the third survey, WTP was elicited for reductions in risks associated with automobile accidents, blood transfusion, and pneumonia at advanced ages.

    In each case, subsets of respondents were presented with different numerical magnitudes of risk reduction, allowing split-sample estimation of sensitivity to scope. In the second survey, half the respondents were asked to rate the helpfulness of alternative analogies in understanding probabilities (e.g., minutes in a year, inches in a mile, empty seats in a football stadium) and were presented with a minutes per year analogy for each risk (e.g., a 20/100,000 risk is like 105 minutes in a year). In addition, we tested an "indifference-risk" elicitation method in which respondents are asked how large a risk reduction would be required for them to purchase a safety device at a stated price.

    In the third survey, respondents were randomly assigned to one of three treatment groups or a control group. Respondents in each treatment group were presented with one of three visual aids used to communicate the risk reductions: a logarithmic risk ladder, a hierarchical linear risk ladder, and a page with 25,000 dots. These visual aids were based on risk communication aids previously used in contingent valuation.

    Our results reflect substantial variation between topics and details of the elicitation process, with some variations yielding results that are consistent with the theoretically prescribed proportionality between WTP and probability change. With respect to the pure telephone surveys (no visual aids), in the automobile context, we consistently find statistically significant differences in WTP using the indifference-risk approach (eliciting indifference risk reductions for specified prices in the second survey) but not using the conventional format (eliciting WTP for specified risk changes in the first survey). Similar conclusions were obtained using both external (between subsample) and internal (within subsample) comparisons. In the indifference-risk elicitation, estimates based on the subsample of respondents indicating high confidence in their answers were roughly proportional to the price difference; estimates based on less-confident respondents were alternatively inadequately and excessively sensitive to the price difference. We found no difference in WTP to reduce the risk of food contamination, despite an order-of-magnitude variation in the probability increment.

    The telephone-mail-telephone survey revealed substantial differences in sensitivity of WTP to magnitude of risk reduction depending on the visual aid used. We found that WTP depends on the magnitude of risk reduction for three groups of respondents presented with alternative visual aids, but not for the subsample that did not receive any visual aid. Estimated WTP is consistent with the theoretically predicted proportionality to risk change for the subgroups presented with a logarithmic scale or an array of 25,000 dots, but not for the subgroups receiving a linear scale or no visual aid. These results suggest that CV can provide valid estimates of WTP for mortality risk reduction, if appropriate methods are used to communicate the risk change to respondents.

    In addition to the primary goals of this research, we included questions on the final survey to elicit respondents' preferences between lotteries on lifespan. By asking respondents to choose between lotteries having a common life expectancy but differences in risk (i.e., one lottery second-order stochastically dominates the other), we can determine whether respondents act in a risk averse, risk seeking, or risk neutral manner with respect to each choice. Preliminary analysis of these results suggests people do not hold a constant risk posture across pairs of lotteries, but rather their preferences depend upon life expectancy and other factors. This work, which was presented by Phaedra Corso at the 1999 Society for Medical Decision Making Annual Conference, was awarded the Lee B. Lusted Student Prize for best research presentation by a student. A manuscript reporting this work is in preparation.

    Finally, with funding from the Chiang Chin-Kuo Foundation for International Scholarly Exchange (USA), we conducted similar CV studies in Taiwan to compare the sensitivity of estimated WTP to magnitude of risk reduction in the two societies. Without visual aids, we found a similar lack of sensitivity in the two populations.

    In addition to publications, this work has been reported at the NCER investigator conferences as well as at numerous professional conferences and university seminars, including presentations at the American Economics Association/Association of Environmental and Resource Economists conferences, the Society for Risk Analysis conferences, the National Bureau of Economic Research Summer Institute, and the Taipei International Conference on Health Economics.

    Journal Articles:

    Corso PS, Hammitt JK, Graham JD. Evaluating the effect of visual aids on willingness to pay for reductions in mortality risk. Journal of Risk and Uncertainty (submitted in October 1999).

    Hammitt JK, Liu J-T, Lin W-C. Sensitivity of willingness to pay to the magnitude of risk reduction: a Taiwan-United States comparison. J Risk Uncertainty (submitted for publication).

    Hammitt JK, Graham JD. Willingness to pay for health protection: inadequate sensitivity to probability? J Risk and Uncertainty 1999;18(1):33-62.

    Presentations:

    Corso P, Hammitt JK. Attitudes toward uncertain longevity: are individual risk postures consistent? Presented at the Society for Medical Decision Making Annual Meeting, Reno, NV, October 1999.

    Hammit JK. Contingent valuation of health risks. Presented at the Tenth New England Statistics Symposium, Department of Mathematical Statistics, Worcester Polytechnic Institute, Worcester, MA, April 1996.

    Hammitt JK. Do visual aids enhance the sensitivity of CV-estimated WTP for reductions in mortality risk? To be presented at the American Economics Association/Association of Environmental and Resource Economists, Boston, MA, January 2000.

    Hammitt JK. Do visual aids enhance the sensitivity of CV-estimated WTP for reductions in mortality risk? Presented at the National Bureau of Economic Research, Summer Institute Workshop on Public Policy and the Environment, Cambridge, MA, August 1999.

    Hammitt JK. Sensitivity of willingness to pay to the magnitude of risk reduction: a Taiwan-United States comparison. Presented at the Taipei International Conference on Health Economics, Institute of Economics, Academia Sinica, Taipei, Taiwan, March 1999.

    Hammitt JK. The economic value of reducing health risks: risk perception, communication, and contingent valuation. Presented at the Society for Risk Analysis?Europe Annual Meeting, Paris, France, October 1998.

    Hammitt JK. Willingness to pay for health protection: inadequate sensitivity to probability? Presented at the Department of Agricultural and Resource Economics, University of Maryland, College Park, MD, February 1999.

    Hammitt JK. Willingness to pay for health protection: sensitivity to risk. Presented at the American Economics Association/Association of Environmental and Resource Economists, Chicago, IL, January 1998.

    Hammitt JK. Willingness to pay for health risk reduction. Presented at the Society for Risk Analysis, Washington, DC, December 1997.

    Hammitt JK. Willingness to pay for health risk reduction. Presented at the Department of Health Policy and Management, Harvard School of Public Health, Boston, MA, December 1997.

    Supplemental Keywords: willingness to pay, contingent valuation, sensitivity to scope, risk communication, health risk. , Economic, Social, & Behavioral Science Research Program, RFA, Scientific Discipline, Ecology and Ecosystems, Economics & Decision Making, Health Risk Assessment, decision-making, contingent valuation, cost benefit, decision analysis, economic benefits, ecosystem valuation, environmental policy, environmental values, human health risk, interviews, magnitude variation, policy analysis, preference formation, psychological attitudes, public policy, public values, risk preferences, social psychology, standards of value, stated preference, surveys, valuation, valuing environmental quality


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