Risk perception and the value of safety.

Journal Article (Journal Article)

This paper examines the relationship between perceived risk and willingness-to-pay (WTP) for increased safety from technological hazards in both conceptual and empirical terms. A conceptual model is developed in which a given household's WTP for risk reductions is a function of traditional socioeconomic variables (i.e., income and base level of risk) and perceived characteristics of the hazards (i.e., dread, knowledge, and exposure). Data to estimate the model are obtained through a combined contingent valuation and risk perception survey that considers 10 technological hazards, five of which are well-defined (e.g., death rates are known and the risks are relatively common) and five are less well-defined. Econometric results, using TOBIT estimation procedures, support the importance of both types of variables in explaining WTP across all 10 hazards. When the risks are split into two groups, the results show that WTP for well-defined hazards is most influenced by perceived personal exposure, while WTP for less well-defined risks is most influenced by levels of dread and severity.

Full Text

Duke Authors

Cited Authors

  • McDaniels, TL; Kamlet, MS; Fischer, GW

Published Date

  • December 1992

Published In

Volume / Issue

  • 12 / 4

Start / End Page

  • 495 - 503

PubMed ID

  • 1480797

Electronic International Standard Serial Number (EISSN)

  • 1539-6924

International Standard Serial Number (ISSN)

  • 0272-4332

Digital Object Identifier (DOI)

  • 10.1111/j.1539-6924.1992.tb00706.x


  • eng