Paying for Permanence: Public Preferences for Contaminated Site Cleanup

Anna Alberini, Stefania Tonin, Margherita Turvani and Aline Chiabai
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Stefania Tonin: University of Venice-IUAV
Margherita Turvani: University of Venice-IUAV
Aline Chiabai: Fondazione Eni Enrico Mattei

No 2006.113, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We use conjoint choice questions to investigate people’s preferences for income and reductions in mortality risks delivered by contaminated site remediation policies. Our survey is self-administered using the computer by residents of four cities in Italy with severely contaminated sites. We estimate the Value of a Statistical Life to be about €5.6 million for an immediate risk reduction. If the risk reduction takes place 20 years from now, however, the implied VSL is about €1.26 million. The discount rate implicit in the responses to the conjoint choice questions is about 7%. People are willing to pay for permanent risk reductions, but not just any amount. Risk reductions in the nearer future are valued more highly than risk reductions in the more distant future. We also find that the VSL is “individuated,” in the sense that it depends on observable individual characteristics of the respondents, familiarity with contaminated sites, concern about the health effects of exposure to toxicants, having a family member with cancer, perceived usefulness of possible government actions, and the respondent’s beliefs about the goals of government remediation programs. Additional questions suggest that respondents discount lives, and do so at a discount rate in the ballpark of that implicit in their risk v. money tradeoffs.

Keywords: Value of a Statistical Life; Latent Risk Reductions; Individual Discount Rates; Conjoint Choice Questions; Contaminated Sites; Remediation (search for similar items in EconPapers)
JEL-codes: J17 I18 K32 Q51 Q53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-env and nep-law
Date: 2006-09
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Related works:
Journal Article: Paying for permanence: Public preferences for contaminated site cleanup (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:fem:femwpa:2006.113

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