Hostname: page-component-8448b6f56d-wq2xx Total loading time: 0 Render date: 2024-04-23T11:57:38.872Z Has data issue: false hasContentIssue false
  • English
  • Français

The Perception and Excessive Valuation of Small, Publicized Drinking Water Risks

Published online by Cambridge University Press:  04 June 2020

W. Kip Viscusi ,
Joel Huber  and
Jason Bell
W. Kip Viscusi*
Affiliation:
University Distinguished Professor of Law, Economics, and Management, Vanderbilt Law School, 131 21st Ave. South, Nashville, TN37203
Joel Huber
Affiliation:
Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC27708
Jason Bell
Affiliation:
Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC27708
*
*e-mail: kip.viscusi@vanderbilt.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

Low probability risks create challenges for individual decisions and potential pressures for government regulation. This article reports original survey evidence regarding the public’s perception and valuation of water-related risks from plastic bottles with bisphenol A, residues in drinking water of the herbicide atrazine, and trace amounts of prescription drugs in water. People who believe that they face high water-related risks generally believe that the risks apply and, given that belief, are willing to pay more to limit the risk. However, the expressed willingness to pay for risk reductions is inordinately high even among those who are unsure of whether they are even exposed to the risk, and therefore may not be reliable as values for the actual benefits.

Keywords

ambiguity aversionatrazinebehavioralbenefit-cost analysisbisphenol ABPAdrinking waterprescription drugsriskwillingness to payD61D81K32Q51I18
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 11 , Issue 2 , Summer 2020 , pp. 221 - 243
Copyright
© Society for Benefit-Cost Analysis, 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Belzer, Richard B. in press. “Achieving Economically Feasible Drinking Water Regulation.” Journal of Benefit-Cost Analysis. doi: https://doi.org/10.1017/bca.2019.21Google Scholar
Burnett, J. K., and Hahn, R. W. 2001a. “A Costly Benefit: Economic Analysis Does Not Support EPA's New Arsenic Rule.” Regulation, 24: 44–49.Google Scholar
Burnett, J. K., and Hahn, R. W. 2001b. EPA's Arsenic Rule: The Benefits of the Standard Do Not Justify the Costs. Washington, DC: AEI-Brookings Joint Center for Regulatory Studies.Google Scholar
Cory, Dennis C., and Taylor, Lester D.. 2017. “On the Distributional Implications of Safe Drinking Water Standards.” Journal of Benefit-Cost Analysis , 8(1): 49–90.CrossRefGoogle Scholar
Davey, Monica. 2015. "Flint Officials Are No Longer Saying the Water is Fine." New York Times, October 7, 2015.Google Scholar
Dudley, Susan F., Mannix, Brian F., Perez, Daniel R., and Carrigan, Christopher. 2019. “Dynamic Benefit-Cost Analysis for Uncertain Futures.” Journal of Benefit-Cost Analysis, 10(2): 206–225.CrossRefGoogle Scholar
Ellsberg, Daniel. 1961. “Risk, Ambiguity, and the Savage Axioms,” Quarterly Journal of Economics, 75(4): 643–669.10.2307/1884324CrossRefGoogle Scholar
Fischhoff, Baruch, Lichtenstein, Sarah, Slovic, Paul, Derby, Stephen, and Keeney, Ralph L.. 1981 . Acceptable Risk. Cambridge, UK: Cambridge University Press.Google Scholar
Kahneman, Daniel, and Tversky, Amos. 1979. “Prospect Theory: An Analysis of Decision under Risk,” Econometrica, 47(2): 263–292.CrossRefGoogle Scholar
Kniesner, Thomas J. 2019. “Behavioral Economics and the Value of a Statistical Life.” Journal of Risk and Uncertainty, 58(2/3): 207–217.CrossRefGoogle Scholar
Mannix, Brian and Dudley, Susan E.. 2015. “The Limits of Irrationality as a Rationale for Regulation.” Journal of Policy Analysis and Management, 34(3): 705–712.CrossRefGoogle Scholar
Portney, Paul R. 1992. “Trouble in Happyville.” Journal of Policy Analysis and Management, 11(1): 131–132.10.2307/3325137CrossRefGoogle Scholar
Raucher, Robert S., Rubin, Scott J., Crawford-Brown, Douglas, and Lawson, Megan M.. 2011. “Benefit-Cost Analysis for Drinking Water Standards: Efficiency, Equity, and Affordability Considerations in Small Communities.” Journal of Benefit-Cost Analysis , 2(1): 1–24.CrossRefGoogle Scholar
Robinson, Lisa R. and Hammitt, James K.. 2011. “Behavioral Economics and the Conduct of Benefit-Cost Analysis: Towards Principles and Standards.” Journal of Benefit-Cost Analysis, 2 (2): 1–51.CrossRefGoogle Scholar
U.S. Environmental Protection Agency. 2017. “Accessing and Managing Chemicals under TSCA, Risk Management for Bisphenol A (BPA).” Last updated on June 22, 2017.Google Scholar
U.S. Environmental Protection Agency. 2018. “Atrazine—Background and Updates.” Last updated July 26, 2018.Google Scholar
Viscusi, W. Kip. 1997. “Alarmist Decisions with Divergent Risk Information.” Economic Journal, 107(445): 1657–1670.10.1111/j.1468-0297.1997.tb00073.xCrossRefGoogle Scholar
Viscusi, W. Kip. 2018. Pricing Lives: Guideposts for a Safer Society. Princeton, NJ: Princeton University Press.Google Scholar
Viscusi, W. Kip, and Chesson, Harrell. 1999. “Hopes and Fears: The Conflicting Effects of Risk Ambiguity.” Theory and Decision, 47(2): 153–178.CrossRefGoogle Scholar
Viscusi, W. Kip and Gayer, Ted. 2016. “Rational Benefit Assessment for an Irrational World: Toward a Behavioral Transfer Test.” Journal of Benefit-Cost Analysis, 7(1): 69–91.10.1017/bca.2016.2CrossRefGoogle Scholar
Viscusi, W. Kip, Huber, Joel, and Bell, Jason. 2014. “Assessing Whether There is a Cancer Premium for the Value of a Statistical Life.” Health Economics, 23(4): 384–396.10.1002/hec.2919CrossRefGoogle ScholarPubMed
Viscusi, W. Kip, Huber, Joel, and Bell, Jason. 2019. “Responsible Precautions for Uncertain Environmental Risks.” Journal of Benefit-Cost Analysis, 10(2): 296–315.CrossRefGoogle Scholar
Viscusi, W. Kip, and Magat, Wesley A.. 1992. “Bayesian Decisions with Ambiguous Belief Aversion.” Journal of Risk and Uncertainty , 5(4): 371–387.CrossRefGoogle Scholar
World Health Organization. 2003. Atrazine in Drinking-Water: Background Document for Development of WHO Guidelines for Drinking-Water Quality. Geneva, Switzerland: World Health Organization.Google Scholar
World Health Organization. 2011. Pharmaceuticals in Drinking Water. Geneva, Switzerland: World Health Organization.Google Scholar