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A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infants' Health: The Case of Nitrates in Drinking Water

John Loomis, Cheryl Asmus and Paul Bell

No 9358, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The objective of this research was to estimate adults' willingness to pay to reduce health risks to their or other families's infants, the latter to test for altruism. A choice experiment was conducted by having adults pay for bottled water for infants to reduce infants' exposure to nitrates in drinking water. Since nitrates only affect infants' health, we have isolated the adults' willingness to pay just for infants' health by buying bottled water to avoid infants' nitrate intake. Respondents were separated into two treatments, one with hypothetical choices, and the other where respondents were told that one of their four choices would be binding, and they would actually buy bottled water using money given to them at the beginning of the experiment. Results indicate that the marginal willingness to pay for a .001 reduction in risk of shock, brain damage and mortality in the real cash treatment was $2, $3.50 and $10, respectively. In the hypothetical treatment these amounts were $13, $23 and $64, indicating substantial hypothetical bias for the risk reductions. Nonetheless, in both treatments the relative marginal values across the severity of risk reductions are sensible, with willingness to pay to avoid the less severe health effects (e.g., shock) being much less than for the more serious effects such as brain damage and death. While the ratio of hypothetical WTP to actual WTP was rather high at a factor of nearly seven, such degree of hypothetical bias has been found in other experiments (Neil et al., 1994). This high hypothetical bias may be due to the nature of the good being valued, i.e. infant health. Many people express a very strong desire to protect infants, since infants cannot control their own health outcomes. Several statistical tests consistently confirmed that the marginal WTP for the risk reduction was not influenced by whether the individual was buying for his or her own infant or buying for another infant. This suggests there is a high degree of altruism reflected in our WTP results. This altruism continued to hold even when we focused solely on the consequential treatment where real money was involved.

Keywords: Health; Economics; and; Policy (search for similar items in EconPapers)
Pages: 26
Date: 2007
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Journal Article: A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infant Health: The Case of Nitrates in Drinking Water (2009) Downloads
Journal Article: A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infant Health: The Case of Nitrates in Drinking Water (2009) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9358

DOI: 10.22004/ag.econ.9358

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