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Environmental Risks to Children's Health: Parents' Risk Beliefs, Protective Behavior, and Willingness to Pay

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This research extends prior work on formation of risk beliefs and willingness to pay to avoid skin cancer by analyzing decisions parents make concerning their own health, the health of their children, and the health of others outside their immediate family. The research will address five questions: (1) What determines parents' (ex ante) subjective beliefs about their own and their children's risk of contracting skin cancer?; (2) What protective actions do adults take to reduce risks of skin cancer to themselves and to their children?; (3) How much are parents willing to pay (ex ante) to reduce their own and their children's risk of contracting skin cancer?; (4) Are parents willing to pay an additional sum to protect the world's population from skin cancer?; and (5) How do income, family structure and composition, parental education, and other characteristics affect willingness to pay, risk beliefs, and risk-related behaviors?

Approach:
Survey data would be collected according to a unified theoretical framework on perceived risks, protective action, valuation, and altruism. Surveys would be administered by computer to samples drawn from the Hattiesburg, Mississippi Metropolitan Statistical Area, and the Laramie, Wyoming area. The two surveys would be conducted in different years so that any new research questions arising from analysis of the first sample could be investigated in the second. Equations would be econometrically estimated showing determinants of risk-related behaviors (e.g., use of sunscreen and time spent outdoors), risk beliefs, and preferences for risk reduction. The equations would identify differences in how parents view risk to themselves versus risks to children and would be used to develop an indifference map that shows how parents trade off their health against that of their children.

Expected Results:
The proposed research will provide direct evidence on both the absolute and relative valuation of child and adult health, on the formation of parental beliefs about risks to their own and their children's health, and on the determinants of risk-related behavior. The current lack of evidence on these issues impedes evaluation and assessment of environmental policies affecting adults and children. By improving understanding of health risk and valuation, the project will promote more cost-effective allocation of federal and state environmental protection resources.

Metadata

EPA/NSF ID:
R828717
Principal Investigators:
Dickie, Mark
Gerking, Shelby
Technical Liaison:
Research Organization:
Southern Mississippi, University of
Funding Agency/Program:
EPA/ORD/Health Valuation
Grant Year:
2000
Project Period:
Cost to Funding Agency:
$347,373
Project Status Reports:
For the Year 2001

Objective:
This research project extends prior work on formation of risk beliefs and willingness-to-pay to avoid skin cancer by analyzing decisions that parents make concerning their own health, the health of their children, and the health of others outside their immediate family. Five considerations will be addressed: (1) what determines parents? (ex ante) subjective beliefs about their own and their children?s risk of contracting skin cancer; (2) what protective actions do adults take to reduce risks of skin cancer to themselves and to their children; (3) how much are parents willing to pay (ex ante) to reduce their own and their children?s risk of contracting skin cancer; (4) the willingness of parents to pay an additional sum to protect the world?s population from skin cancer; and (5) how income, family structure and composition, parental education, and other characteristics affect willingness-to-pay, risk beliefs, and risk-related behaviors.

Progress Summary:
The pilot survey discussed in the proposal was conducted (without funds from this grant) prior to the reporting period. Analysis of data from the pilot survey yielded some substantive results pertaining to risk beliefs, protective actions, and willingness-to-pay. More importantly, the experience with the pilot survey led to significant improvements in survey design. Substantive results include: (1) parents believe their own lifetime risk of skin cancer is higher than their children's lifetime risk; (2) parents' beliefs about their children's risks are quite sensitive to their beliefs about their own risks; (3) in forming skin cancer risk beliefs about their children, parents account for exposure and protective behavior, but otherwise ignore risk factors identified by health scientists; (4) parents over-estimate risks to themselves and their children (the extent of over-estimation is reduced when parents are provided with risk information); and (5) parents are willing to pay more to reduce risk to their children than to themselves.

The pilot survey has been revised and programmed for computer administration. Based on experience with the pilot, five major improvements were made to the design of the survey:


    In the valuation component of the survey, risk reductions now are assigned to respondents. This revision makes the survey simpler for respondents; it makes risk reductions to the parent and child orthogonal over the sample, and avoids the need to apply instrumental-variables methods.

    The revised survey is designed to allow separate estimation of willingness-to-pay to reduce risks of morbidity and mortality from skin cancer.

    The revised survey collects information on parents' beliefs about latency, and will support tests for the effect of latency on willingness-to-pay to reduce risk.

    Risk beliefs now are elicited using interactive grid squares rather than the risk ladders used in the pilot survey. Interactive grid squares allows finer resolution of risk beliefs than was possible using the ladders.

    The revised survey takes less time, an average of 30 minutes to complete compared to 45 minutes for the pilot.


Three rounds of pre-tests were conducted with a total of 28 respondents while revising the survey into its final form. Procedures for data storage, security, and retrieval also were tested and implemented. Data collection began in May 2002, and slightly more than 5 percent of the 600 surveys now have been completed.

Future Activities:
Survey data collection should be completed in August. At that time, an application to transfer the grant to the University of Central Florida will be submitted, because both investigators now are employed there. Data from the survey will be analyzed during the period covered by the next annual report, results will be disseminated in papers and presentations, and the second survey will be designed.

Presentations:

Dickie M, Gerking S. Parents' valuation of latent health risks in their children. Presented at the U.S. Environmental Protection Agency Workshop, Valuing a Statistical Life: Assessing the State-of-the-Art for Policy Applications, Silver Spring, MD, November 6-7, 2001.

Dickie M, Gerking S. Parents' valuation of latent health risks in their children. To be presented at Risk and Uncertainty in Environmental and Resource Economics, Wageningen, The Netherlands, June 5-7, 2002.

Dickie M, Gerking S. Willingness-to-pay for reduced morbidity. Presented at Economic Valuation of Health for Environmental Policy: Assessing Alternative Approaches, University of Central Florida, Orlando, FL, March 18-19, 2002.

Supplemental Keywords: morbidity valuation, nonmarket valuation, survey, benefit estimation, willingness-to-pay, risk perception.

For the Year 2003:
Objective:
The objective of this research project is to examine the formation of risk beliefs and willingness to pay to avoid skin cancer by analyzing decisions parents make concerning their own health, the health of their children, and the health of others outside their immediate family. The following five questions are being addressed:

(1) What determines parents' (ex ante) subjective beliefs about their own and their children's risk of contracting skin cancer?

(2) What protective actions do parents take to reduce the risk of skin cancer to themselves and to their children?

(3) How much are parents willing to pay (ex ante) to reduce their own and their children's risk of contracting skin cancer?

(4) Are parents willing to pay an additional sum to protect the world's population from skin cancer?

(5) How do income, family structure and composition, parental education, and other characteristics affect willingness to pay, risk beliefs, and risk-related behaviors?

Progress Summary:
The project has generated new empirical estimates aimed at valuing environmental risks affecting parents and children. Although protecting children’s health is an important goal of environmental policy, relatively little is known about the economic benefits of reducing environmental health risks to children. The specific environmental risk considered in this study is skin cancer, the most common form of cancer in the United States. Links between environmental exposure to ultraviolet radiation and skin cancer are well established, and chances of getting skin cancer from a given amount of exposure to solar radiation partially depend on observable genetic characteristics such as skin type and complexion.

Preliminary results indicate that parents believe their own lifetime risk of getting skin cancer, and of dying from the disease if it is contracted, is greater than their children's risk. Parents value reductions in their children's risks more than twice as highly as reductions in their own risks. Also, parents view reductions in mortality risk as about 20 times more valuable than reductions in morbidity risk, both for themselves and their children. There appear to be significant differences in risk perceptions and valuations between persons with different demographic characteristics.

A key advantage of this project is that morbidity and mortality risks are treated together in a consistent theoretical framework. Prior studies of health risks treat either morbidity or mortality, but not both, yet these two health outcomes obviously are related (i.e., death is a possible outcome of illness). Also, risk is treated as endogenous and is measured as the risk perceived by survey respondents. An important methodological advantage of the study is that data are collected using an experimental design that randomizes health risk changes presented to parents. This feature sidesteps a number of statistical problems because risk changes are exogenous treatments that are unrelated to individual characteristics.

A theoretical model is developed to support the empirical estimation of economic benefits of reducing risks faced by both parents and children. The model shows how to compute parents' marginal rates of substitution between their own and their children's risks. This calculation reveals how parents value their children's health relative to their own and may be useful for benefits transfer in situations where willingness to pay for reduced risk to adults has been established but corresponding values for children are not available. The model also shows how to compute parents' marginal rates of substitution between the risk of getting skin cancer and the risk of dying from the disease. This calculation reveals the relative value to parents of reducing morbidity and mortality risk, and may provide useful information in examining priorities for environmental risk reduction.

The model is estimated using data collected by an interactive computerized questionnaire administered in Hattiesburg, MS, during the summer of 2002. The survey was developed based on results of a pilot survey of 160 parents in the same community. The pilot survey also focused on skin cancer risk valuation for parents and children, but was not funded by this grant. Hattiesburg is located in the southern part of Mississippi, has a mean annual high temperature reading of 77.5F, a subtropical climate, and a large number of sunshine days each year. Thus, residents have experienced the consequences of exposure to ultraviolet radiation from sunlight. The sample was drawn by random digit dialing.

Key aspects of the experimental design used in the survey were to: (1) determine parents' perceptions of skin cancer risk to themselves and their children; and (2) obtain willingness to pay for skin cancer risk reductions. Parents' subjective assessments of their own and their children's risks of contracting skin cancer, and of dying from the disease, were assessed using interactive risk scales that closely resemble the grid squares used by previous researchers. Risk reductions were presented to parents using randomly assigned labels of a hypothetical sun lotion that offered different amounts of protection to adults and children. Although marginal rates of substitution are obtained from parents' stated preferences for hypothetical sunscreen lotions, the desired estimates are ratios of bids. Thus, the problem identified in earlier research that stated preference bids overestimate what people actually would pay may be at least partially ameliorated.

Results reveal considerable variation in perceptions about lifetime skin cancer risk, with some parents believing that skin cancer is highly unlikely and a smaller number of other parents believing that skin cancer virtually is inevitable. On average, parents believe they are more likely to get skin cancer than their children, and parents appear to have overestimated the risk of contracting skin cancer, relative to epidemiological evidence. Regarding the possibility of death from skin cancer, most parents appear to be aware that skin cancer is seldom fatal. Again, the average parent believes their own risk of dying from skin cancer is larger than their child's risk.

Preliminary estimates indicate that parents' marginal rates of substitution between their children's unconditional lifetime risk of dying from skin cancer and the corresponding risk for themselves are about 2.33, although there are significant differences depending on the age and gender of the child. Estimates of parents' marginal rates of substitution between morbidity and mortality risk indicate that reducing mortality risk is 20 times more valuable than reducing morbidity risk, for both parents and children. These results suggest that the children's health component of benefits for environmental risk reduction may be quite large, while the morbidity (as opposed to mortality) component may be quite small.

Future Activities:
The researchers will prepare final versions of manuscripts cited above for submission to peer-reviewed journals, and prepare a draft of the book. The original proposal for this award envisioned a followup survey that would validate results obtained in the Hattiesburg survey. Laramie, WY, was the site proposed for the second survey. In light of response rates achieved in the Hattiesburg survey, however, Laramie is now considered too small a city to collect the needed number of observations. Consequently, Knowledge Networks will conduct the second survey using a national panel of respondents. The design of this survey and the scope of research will hold as closely as possible to the aims of the original proposal. The survey has been approved by the Institutional Review Board, and it will be fielded as soon as possible once administrative and budgetary issues are resolved.

Supplemental Keywords:
nonmarket valuation, preferences, children, risk, human health, stratospheric ozone, survey, contingent valuation, public policy, cost benefit, economics, social science, socioeconomic, age, race, sex, CFCs, EPA Region 4, willingness to pay, risk beliefs, risk-related behavior, skin cancer, ultraviolet radiation, solar radiation, morbidity and mortality risks. , Air, Geographic Area, Health, RFA, Scientific Discipline, Children's Health, Ecological Risk Assessment, Ecology and Ecosystems, Economics, Social Science, State, Susceptibility/Sensitive Population/Genetic Susceptibility, air toxics, genetic susceptability, Mississippi (MS), WY, Wyoming, adult valuation of children's health, behavioral assessment, benefits transfer, children, children's health values, environmental effects, environmental health hazard, environmental risks, environmental values, family values, level of education, measuring childhood exposure, modeling parental behavior, morbidity valuation, parent's risk beliefs, risk, risk assessment, sensitive populations, skin cancer, stratospheric ozone, survey, toxics, willingness to pay

Project Reports:

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