Household Decision-Making and Valuation of Environmental Health Risks to Parents and Their Children

Journal of the Association of Environmental and Resource Economists 1(4): 481-519.

Posted: 18 Jan 2014 Last revised: 15 Dec 2014

See all articles by Wiktor Adamowicz

Wiktor Adamowicz

University of Alberta

Mark Dickie

University of Central Florida - College of Business Administration - Department of Economics

Shelby Gerking

University of Central Florida - College of Business Administration - Department of Economics

Marcella Veronesi

University of Verona - Department of Economics; Center for Development and Cooperation (NADEL)

David Zinner

University of Alberta

Date Written: 2014

Abstract

This paper empirically discriminates between alternative household decision-making models for estimating parents’ willingness to pay for health risk reductions for their children as well as for themselves. Models are tested using data pertaining to heart disease from a stated preference survey involving 432 matched pairs of parents married to one another. Analysis is based on a collective model of parental resource allocation that incorporates household production of perceived health risks and allows for differences in preferences and risk perceptions between parents. Results are consistent with Pareto efficiency within the household, which implies that (1) for a given proportionate reduction in health risk, parents are willing to pay the same amount of money at the margin to protect themselves and the child; and (2) parents’ choices about proportionate health risk reductions for their children are based on household valuations, rather than their own individual valuations. Results also suggest that the marginal willingness to pay of mothers and fathers for health risk protection is sensitive to a shift in intra-household decision-making power between parents.

Suggested Citation

Adamowicz, Wiktor and Dickie, Mark and Gerking, Shelby and Veronesi, Marcella and Zinner, David, Household Decision-Making and Valuation of Environmental Health Risks to Parents and Their Children (2014). Journal of the Association of Environmental and Resource Economists 1(4): 481-519., Available at SSRN: https://ssrn.com/abstract=2380415 or http://dx.doi.org/10.2139/ssrn.2380415

Wiktor Adamowicz

University of Alberta ( email )

Edmonton, Alberta T6G 2R3
Canada

Mark Dickie

University of Central Florida - College of Business Administration - Department of Economics ( email )

Orlando, FL 32816-1400
United States

Shelby Gerking

University of Central Florida - College of Business Administration - Department of Economics ( email )

Orlando, FL 32816-1400
United States

Marcella Veronesi (Contact Author)

University of Verona - Department of Economics ( email )

Via Cantarane 24
Verona, 37129
Italy

Center for Development and Cooperation (NADEL) ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015
Switzerland

David Zinner

University of Alberta ( email )

Edmonton, Alberta T6G 2R3
Canada

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