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

Published online by Cambridge University Press:  04 June 2020

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

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.

Type
Article
Copyright
© Society for Benefit-Cost Analysis, 2020

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