Household Decision-Making and Valuation of Environmental Health Risks to Parents and their Children

Wiktor Adamowicz, Mark Dickie, Shelby Gerking, Marcella Veronesi and David Zinner

No 280916, National Center for Environmental Economics-NCEE Working Papers from United States Environmental Protection Agency (EPA)

Abstract: This paper empirically discriminates between alternative household decision-making models for estimating parents’ willingness to pay for health risk reductions for their children as well as for themselves. Models are tested using data pertaining to heart disease from a stated preference survey involving 432 matched pairs of parents married to one another. Analysis is based on a collective model of parental resource allocation that incorporates household production of perceived health risks and allows for differences in preferences and risk perceptions between parents. Results are consistent with Pareto efficiency within the household, which implies that (1) for a given proportionate reduction in health risk, parents are willing to pay the same amount of money at the margin to protect themselves and the child; and (2) parents’ choices about proportionate health risk reductions for their children are based on household valuations, rather than their own individual valuations. Results also suggest that the marginal willingness to pay of mothers and fathers for health risk protection is sensitive to a shift in intra-household decision-making power between parents.

Keywords: Environmental Economics and Policy; Health Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 62
Date: 2013-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nceewp:280916

DOI: 10.22004/ag.econ.280916

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