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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 ,
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: [email protected]
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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

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