The value of private versus public risk and pure altruism: an experimental economics test

Kent Messer (), Gregory Poe and William D. Schulze

Applied Economics, 2013, vol. 45, issue 9, 1089-1097

Abstract: In 1996, Johannesson et al . published a paper entitled ‘The Value of Private Safety versus the Value of Public Safety’. Based on the preliminary evidence from a hypothetical contingent valuation study for public and private safety, these authors argue that consumers behave as ‘pure altruists’ who consider the cost of a program that might be imposed on other voters when they determine their maximum willingness-to-pay for public safety programs. The authors conclude that further empirical research in this area is warranted. This article presents a set of laboratory economics experiments to test Johannesson et al .'s conjecture under controlled conditions in which participants face an actual risk of financial loss. The laboratory results extend those of Johannesson et al .'s, providing strong evidence of pure altruism in coercive settings involving public risks.

Date: 2013
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DOI: 10.1080/00036846.2011.608645

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