Sensitivity to scope in contingent valuation – introducing a flexible community analogy to communicate mortality risk reductions

Björn Sund ()
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Björn Sund: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden

No 2009:2, Working Papers from Örebro University, School of Business

Abstract: Validity in contingent valuation (CV) is often tested through the sensitivity of estimated willingness to pay (WTP) to the size or quality of a good or service (‘more is better’ and near proportionality). We investigate the performance of two communication aids (a flexible community analogy and an array of dots) in valuing mortality risk reductions for out-of-hospital cardiac arrest. Our results do not support the prediction of expected utility theory, i.e. that WTP for a mortality risk reduction increases with the amount of risk reduction (weak scope sensitivity), for any of the communication aids. In fact, the array of dots even shows a decreasing WTP when the risk reduction is larger. We find some evidence that level of education influences how communication aids are perceived. Also, a larger municipal population results in lower WTP which may signal problems with strategic bias.

Keywords: Contingent valuation; Willingness to pay; Validity; Sensitivity to scope; Risk communication; Community analogy; Cardiac arrest (search for similar items in EconPapers)
JEL-codes: D83 I18 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2009-02-03
New Economics Papers: this item is included in nep-dcm
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:oruesi:2009_002

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