The Perception and Excessive Valuation of Small, Publicized Drinking Water Risks

35 Pages Posted: 13 Feb 2020

See all articles by W. Kip Viscusi

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Joel Huber

Duke University - Fuqua School of Business

Jason Bell

Duke University - Fuqua School of Business

Date Written: February 5, 2020

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 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

Suggested Citation

Viscusi, W. Kip and Huber, Joel and Bell, Jason, The Perception and Excessive Valuation of Small, Publicized Drinking Water Risks (February 5, 2020). Vanderbilt Law Research Paper No. 20-09, Available at SSRN: https://ssrn.com/abstract=3536627 or http://dx.doi.org/10.2139/ssrn.3536627

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

Joel Huber

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7785 (Phone)

Jason Bell

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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