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The value of mortality risk reductions. Pure altruism - a confounder?

Dorte Gyrd-Hansen (), Trine Kjær () and Jytte Seested Nielsen ()
Additional contact information
Dorte Gyrd-Hansen: COHERE, Postal: Department of Business and Economics, University of Southern Denmark
Trine Kjær: COHERE, Postal: Department of Business and Economics, University of Southern Denmark
Jytte Seested Nielsen: Newcastle University Business School, Postal: United Kingdom

No 2016:5, DaCHE discussion papers from University of Southern Denmark, Dache - Danish Centre for Health Economics

Abstract: This paper examines public valuations of mortality risk reductions. We set up a theoretical framework that allows for altruistic preferences, and subsequently test theoretical predictions through the design of a discrete choice experiment. By varying the tax scenario (uniform versus individual tax), the experimental design allows us to verify whether pure altruistic preferences are present and the underlying causes. We find evidence of negative pure altruism. Under a coercive uniform tax system respondents lower their willingness to pay possibly to ensure that they are not forcing others to pay at a level that corresponds to their own – higher – valuations. This hypothesis is supported by the observation that respondents perceive other individuals’ valuations to be lower than their own. Our results suggest that public valuations of mortality risk reductions may underestimate the true societal value because respondents are considering other individuals’ welfare, and wrongfully perceive other people’s valuations to be low.

Keywords: Altruism; Risk reduction; Willingness-to-pay; Stated preferences (search for similar items in EconPapers)
JEL-codes: D60 D70 I10 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2016-05-01
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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