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Valuation of Childhood Risk Reduction: The Importance of Age, Risk Preferences, and Perspective
Author(s) -
Dockins Chris,
Jenkins Robin R.,
Owens Nicole,
Simon Nathalie B.,
Wiggins Lanelle Bembenek
Publication year - 2002
Publication title -
risk analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.972
H-Index - 130
eISSN - 1539-6924
pISSN - 0272-4332
DOI - 10.1111/0272-4332.00018
Subject(s) - perspective (graphical) , willingness to pay , valuation (finance) , actuarial science , contingent valuation , willingness to accept , estimation , public economics , psychology , economics , microeconomics , finance , computer science , management , artificial intelligence
This article explores two problems analysts face in determining how to estimate values for children's health and safety risk reductions. The first addresses the question: Do willingness‐to‐pay estimates for health risk changes differ across children and adults and, if so, how? To answer this question, the article first examines the potential effects of age and risk preferences on willingness to pay. A summary of the literature reporting empirical evidence of differences between willingness to pay for adult health and safety risk reductions and willingness to pay for health and safety risk reductions in children is also provided. The second dimension of the problem is a more fundamental issue: Whose perspective is relevant when valuing children's health effects—society's, children's, adults‐as‐children, or parents'? Each perspective is considered, followed ultimately by the conclusion that adopting a parental perspective through an intrahousehold allocation model seems closest to meeting the needs of the estimation problem at hand. A policy example in which the choice of perspective affects the outcome of a regulatory benefit‐cost analysis rounds out the article and emphasizes the importance of perspective.