Risk, Self-Protection, and Ex Ante Economic Value

Jason Shogren and Thomas Crocker

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: We develop three propositions about the ex ante value of reduced risk. If there is a continuous outcome distribution and if self-protection influences outcome probability and severity, then: (1) unobservable utility terms cannot be eliminated from the ex ante value expressions; (2) knowledge of the convexity or the nonconvexity of dose-response functions is insufficient to sign changes in these expressions; and (3) self-protection expenditures need not be a lower bound measure of these expressions. Therefore, many restrictions applied in recent empirical work on the economic value of risk changes are not immediately transferable to settings where endogenous risks prevail.

Date: 1990-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/90wp57.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=658 Online Synopsis (text/html)

Related works:
Journal Article: Risk, self-protection, and ex ante economic value (1991)
Working Paper: Risk, Self-Protection, and Ex Ante Economic Value (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:90-wp57

Access Statistics for this paper

More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().