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Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children

Author

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  • Wiktor Adamowicz
  • Mark Dickie
  • Shelby Gerking
  • Marcella Veronesi
  • David Zinner

Abstract

This paper empirically discriminates between household decision-making models for estimating parents' willingness to pay for health risk reductions for their children and for themselves. Models are tested using data from a stated preference survey involving 432 matched pairs of married parents. Analysis builds on a collective model of resource allocation that incorporates household production of perceived health risks and allows for differences in preferences and risk perceptions between parents. Results are consistent with Pareto efficiency within the household. Thus, for a given proportionate reduction in health risk, (1) parents are willing to pay equal amounts at the margin to protect themselves and the child and (2) parents' choices for their children are based on household valuations, rather than individual valuations. The marginal willingness to pay of mothers and fathers for health risk protection appears insensitive to shifts in their relative contributions to the household budget.

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  • Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2014. "Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 481-519.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/679255
    DOI: 10.1086/679255
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    Cited by:

    1. 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.
    2. George Parsons & Kelley Myers, 2017. "Fat tails and truncated bids in contingent valuation: an application to an endangered shorebird species," Chapters, in: Daniel McFadden & Kenneth Train (ed.), Contingent Valuation of Environmental Goods, chapter 2, pages 17-42, Edward Elgar Publishing.
    3. Menon Martina & Perali Federico & Veronesi Marcella, 2017. "“Leaving No Child Behind:” Preferences for Social Inclusion and Altruism," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(3), pages 1-19, July.
    4. Anna Bartczak & Wiktor Budziński & Susan Chilton & Rebecca McDonald & Jytte Seested Nielsen, 2021. "Altruism and efficient allocations in three-generation households," Journal of Risk and Uncertainty, Springer, vol. 62(2), pages 113-135, April.
    5. Austin, Wes & Heutel, Garth & Kreisman, Daniel, 2019. "School bus emissions, student health and academic performance," Economics of Education Review, Elsevier, vol. 70(C), pages 109-126.
    6. Shelby Gerking & Wiktor Adamowicz & Mark Dickie & Marcella Veronesi, 2017. "Baseline risk and marginal willingness to pay for health risk reduction," Journal of Risk and Uncertainty, Springer, vol. 55(2), pages 177-202, December.
    7. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    8. Carla Guerriero & John Cairns & Fabrizio Bianchi & Liliana Cori, 2018. "Are children rational decision makers when they are asked to value their own health? A contingent valuation study conducted with children and their parents," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 55-68, February.
    9. Robinson, Lisa A. & Raich, William J. & Hammitt, James K. & O’Keeffe, Lucy, 2019. "Valuing Children’s Fatality Risk Reductions," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(2), pages 156-177, July.

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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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