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A Laboratory Experiment for the Estimation of Health Risks: Policy Recommendations

Andreas Drichoutis (), Phoebe Koundouri () and Mavra Stithou

No 1316, DEOS Working Papers from Athens University of Economics and Business

Abstract: Environmental health hazards in Asopos River Basin (RB) rise concerns on health risk not only for the residents of the catchment but also for the consumers of the area s products across the country. As a result, the focus of this chapter is on the estimation of theses health risks. In order to assess the social cost from consuming products produced in an area where water resources are not in good condition a lab experimental auction has been conducted. According to the details of the experiment presented at the beginning of the chapter all participants were asked to bid to exchange a product from region A (the polluted one) with a similar product from a region in a good ecological status (in the terminology of the European Water Framework Directive (WFD)), region B. After the presentation of the employed methodology econometric analysis was conducted. The output of this analysis is an average Willingness-to-Pay (WTP) for the specific sample of consumers. WTP represents the maximum amount of money a person would be willing to pay in order to receive a good or avoid an undesired impact. The chapter concludes with policy recommendations and suggests that unless an epidemiology study confirms the health hazards from consuming agricultural products cultivated in the area of Asopos (area similar to the characteristics of region A), the estimated amount is a net cost suffered by the local farmers and compensation measures have to be adopted.

New Economics Papers: this item is included in nep-env, nep-exp and nep-hea
Date: 2013-03-06
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Forthcoming in Koundouri, P., and N. Papandreou (editors); M. Stithou (assistant editor), 2012. Water Resources Management Sustaining Socio-Economic Welfare: The Implementation of the European Water Framework Directive in Asopos River Basin in Greece. Spr

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