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The value of mortality risk reductions. Pure altruism – a confounder?

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  • Gyrd-Hansen, Dorte
  • Kjær, Trine
  • Seested Nielsen, Jytte

Abstract

This paper examines public valuations of mortality risk reductions. We set up a theoretical framework that allows for altruistic preferences, and subsequently test theoretical predictions through the design of a discrete choice experiment. By varying the tax scenario (uniform versus individual tax), the experimental design allows us to verify whether pure altruistic preferences are present and the underlying causes. We find evidence of negative pure altruism. Under a coercive uniform tax system respondents lower their willingness to pay possibly to ensure that they are not forcing others to pay at a level that corresponds to their own – higher – valuations. This hypothesis is supported by the observation that respondents perceive other individuals' valuations to be lower than their own. Our results suggest that public valuations of mortality risk reductions may underestimate the true societal value because respondents are considering other individuals' welfare, and wrongfully perceive other people's valuations to be low.

Suggested Citation

  • Gyrd-Hansen, Dorte & Kjær, Trine & Seested Nielsen, Jytte, 2016. "The value of mortality risk reductions. Pure altruism – a confounder?," Journal of Health Economics, Elsevier, vol. 49(C), pages 184-192.
    • Handle: RePEc:eee:jhecon:v:49:y:2016:i:c:p:184-192
    DOI: 10.1016/j.jhealeco.2016.07.002
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    Cited by:

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    2. Thomas B. Bjørner & Jørgen Brandt & Lars Gårn Hansen & Marianne Nygaard Källstrøm, 2019. "Regulation of air pollution from wood-burning stoves," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 62(8), pages 1287-1305, July.
    3. Dickie, Mark & Adamowicz, Wiktor & Gerking, Shelby & Veronesi, Marcella, 2022. "Risk Perception, Learning, and Willingness to Pay to Reduce Heart Disease Risk," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(3), pages 363-382, October.
    4. Andersson Järnberg, Linda & Andrén, Daniela & Hultkrantz, Lars & Rutström, E. Elisabet & Vimefall, Elin, 2021. "Willingness to pay for private and public improvements of vulnerable road users’ safety," GLO Discussion Paper Series 853, Global Labor Organization (GLO).
    5. Simonsen, Nicolai Fink & Kjær, Trine & Gyrd-Hansen, Dorte, 2021. "Pure altruism and misjudgement: A bad combination?," Journal of Health Economics, Elsevier, vol. 80(C).
    6. Morgan Beeson & Susan Chilton & Michael Jones-Lee & Hugh Metcalf & Jytte Seested Nielsen, 2019. "Can a ‘veil of ignorance’ reduce the impact of distortionary taxation on public good valuations?," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 245-262, June.

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    More about this item

    Keywords

    Altruism; Risk reduction; Willingness to pay; Stated preferences; Value of statistical life;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • I1 - Health, Education, and Welfare - - Health

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