We evaluate the effects of disease type and latency on willingness to pay (WTP) to reduce environmental risks of chronic, degenerative disease. Using contingent-valuation data collected from approximately 1,200 respondents in Taiwan, we find that WTP declines with latency between exposure to...

This article uses survey data obtained from Taiwan to investigate consumer perceptions of smoking risks and the linkage of these perceptions to smoking behavior. In our analysis, two equations are estimated: (1) risk perception, and (2) smoking probability. The simultaneity problem in estimating...

The economic theory of decision making under risk has seen remarkable advances over the 50 years since Pratt’s (1964) characterization of risk aversion under expected utility. We review developments in three key areas to which Louis Eeckhoudt has made significant contributions: (1) increases...

The value of reducing health and mortality risks is often measured using value per statistical life (VSL) or one of several life-year measures (e.g., life years, quality-adjusted life years, disability-adjusted life years). I derive the utility function that is admissible when preferences for...

Evaluation of projects that affect mortality risk usually assumes that risk changes are small and similar across individuals. In reality, risks differ among individuals and information about risk heterogeneity determines the extent to which affected lives are “statistical” or...