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Benefit Transfer Using Values from Adult-oriented Studies to Evaluate Children's Health Effects (Phase 1 - - Theory)

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This research will show how 1) information on children's biological responses to environmental hazard exposures, and 2) the tradeoffs made by parents with limited time and money who must choose between their own consumption and investments in their children's futures can be used jointly to infer the economic values parents attach to reductions in children's exposures to toxic substances, and to child health improvements.

Children live with adults who allocate available household time and money resources among all family members, including children. Because such resources are limited, these adults (parents) must trade off their own well-being against the well-being of their children. Changes in environmental conditions can alter household resources and can affect the health of some household members more than others. These changes influence the tradeoffs parents choose to make because they alter the relative benefits and costs to parents of alternative time and money investments for household members. For example, parents may alleviate the impact of neighborhood pollution upon their child by reducing the child's exposures or by purchasing medical help to cure the child. But these actions are costly, implying that the parents must sacrifice their own consumption or investments in their own health protection. These parental behaviors may amplify or temper the biological responses children make to environmental hazards. This research describes how parents' choices among investments in parents' own-consumption, parents' own-health, and child health change when environmental conditions change.

Objectives/Hypothesis:
This project will show how measures of parents' valuations of own-health may be transformed into measures of parents' valuations of the health of their children. The research will provide a technique or techniques by which adult valuations of own-health may be transformed into adult valuations of children's health.

Approach:
The researchers will construct economic models of the determinants of intra-household allocations of time and money and of the decision processes leading to these allocations. The investigators will also develop economic models of internal household allocations of parental time and money resources to guide efforts to obtain empirical measures of parents' valuations of the own-health and the child health effects of environmental change. The research will also undertake pilot empirical tests and demonstrations of model propositions using the National Maternal and Infant Health Survey and other existing data sets.

Expected Results:
Public health officials want information on the economic benefits of reducing environmental hazards thought to affect children disproportionately in order to evaluate the efficiency of policies designed to reduce these hazards. Original research measuring these benefits is extremely limited and new research to do so is expensive. The results of this project will show how the numerous existing studies of the money equivalent of the adult health benefits of environmental improvements may be translated into money measures of the benefits to child health of these same improvements.

Metadata

EPA/NSF ID:
R828716
Principal Investigators:
Crocker, Thomas D.
Agee, Mark D.
Shogren, Jason F.
Technical Liaison:
Research Organization:
Wyoming, University of
Funding Agency/Program:
EPA/ORD/Health Valuation
Grant Year:
2000
Project Period:
December 1, 2000 to November 30, 2003
Cost to Funding Agency:
$103,495
Project Status Reports:
For 2001:
Objective:
The objective of this research project is to produce empirical estimates guided by rigorous analytical models of parents' valuations of their own health relative to their child's health.

Progress Summary:
We have obtained a significant amount of policy-relevant analytical and empirical results.

The value that parents who smoke attach to their own, self-perceived, overall health status is, on average, about one half the value they attach to the overall health status they perceive for their children. If subsequent studies replicate this estimated relative value, the value adults attach to the health of their children can be inferred from existing studies of the value adults attach to their own health. The demand for distinctive research into the value of child health will then be less compelling.

An approximate one-to-one negative association exists between changes in the discount (interest) rate parents apply to investments in their children's future and changes in the children's full-scale and verbal IQs. A higher discount rate implies a lesser parental willingness to sacrifice their own consumption and investment to enhance the child's cognitive status and hence its adult prospects, including the child's prospective adult earnings. Given the abundant literature on the link between children's cognitive status and their adult earnings, this association between the discount rate and child IQ provides an avenue to assess the value parents attach to their own well being relative to that of their children.

Many of the statistical associations between individuals' health outcomes and valuations, and neighborhood hazards such as air pollution, may be biased by inattention to the set of protections internal to the household the individual can adopt against the threat the hazards pose. Environmental risks are endogenous. Many epidemiological and valuation studies of children's health and environmental hazards, which neglect parents' child-protection activities, should only be hesitantly applied and perhaps rethought.

A clear clear tradeoff exists between the extent to which a parent chooses to use a particular technique of reducing a child's exposure to an environmental hazard, and the efforts parents devote to acquiring access to alternative techniques. Public policies designed to encourage parental use of a particular technique will reduce parental use of alternative techniques. The net impact then may be to increase the risk the child suffers from the hazard.

Future Activities:
Future activities for the next reporting period are to: (1) build and estimate a model of maternal prenatal chosen behaviors and neonatal child health; (2) acquire and evaluate contingent valuation data on parents' relative valuations of risks to own health and child health from food pathogens; and (3) write reports on existing findings about parents' valuations of altruism toward children and on multiple health symptoms in children.

Journal Article:

Agee MD, Crocker TD. Parents' discount rate and the intergenerational transmission of cognitive skills. Economica 2002;69(273):143-154.

Papers:

Archer DW, Crocker TD, Shogren JF. Endogenous risk in child care. Working paper, Department of Economics and Finance, University of Wyoming, Laramie, WY, 2002.

Agee MD, Crocker TD. Smoking parents' valuations of own and children's health. Working paper, Department of Economics and Finance, University of Wyoming, Laramie, WY, 2002.

Presentations:

Agee MD, Crocker TD. Smoking parents' valuations of own and children's health. Presented at the Association of Environmental and Resource Economists Workshop, Bar Harbor, ME, June 28-30, 2001.

Agee MD, Crocker TD. Smoking parents' valuations of own and children's health. Presented at the U.S. Environmental Protection Agency Workshop, Silver Spring, MD, November 2001.

Supplemental Keywords: children's health values, adults' health values, benefits transfer.

Project Reports:

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