The Perception and Excessive Valuation of Small, Publicized Drinking Water Risks
35 Pages Posted: 13 Feb 2020
Date Written: February 5, 2020
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 BPA, residues in drinking water of the herbicide atrazine, and trace amounts of prescription drugs in water. Environmentalists and those 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 for those who are unsure of whether they are even exposed to the risk.
Keywords: risk, drinking water, willingness to pay, behavioral, benefit-cost analysis, bisphenol-a, BPA, atrazine, prescription drugs, ambiguity aversion
JEL Classification: D61, D81, K32, Q51, I18
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