Abstract: The value of mortality risk reduction is an important component of the benefits of environmental policies. In recent years, the number, scope, and quality of valuation studies have increased dramatically. Revealed preference studies of wage compensation for occupational risks, on which analysts have primarily relied, have benefited from improved data and statistical methods. Stated preference research has improved methodologically and expanded dramatically. Studies are now available for several health conditions associated with environmental causes, and researchers have explored many issues concerning the validity of the estimates. With the growing numbers of both types of studies, several meta-analyses have become available that provide insight into the results of both methods. Challenges remain, including better understanding of the persistently smaller estimates from stated preference than from wage differential studies and of how valuation depends on the individual’s age, health status, and characteristics of the illnesses most frequently associated with environmental causes.

Abstract: In this paper, we examine the value of health risk reductions to Canadians in the context of clean and safe drinking water. The health risks we examine pertain both to microbial illnesses and/or deaths and bladder cancer illnesses and/or deaths. The cancer risks arise because chlorine, the most common disinfectant used to remove microbial contaminants, has been implicated in the production of trihalomethanes (a disinfection by-product linked to increases in bladder cancer cases). Under these circumstances, public health agencies face issues of risk–benefit valuation as well as risk–risk assessment. To address this policy issue, we undertook a panel-based Internet survey of 1,600 Canadians conducted in the summer of 2004 and presented respondents with text and graphical information regarding risk changes. We employed two valuation formats (contingent valuation and attribute-based stated choice) to elicit consumer preferences for public programs to reduce health risks associated with improved tap water. We also used multiple analytical methods, including willingness-to-pay space models, and examine a host of comparisons between contingent valuation and attribute-based methods to assess the effect of risk context on value. Our analysis of the stated preferences of consumers reveals several types of values that are of interest to policymakers. These include the value of mortality risk reductions and the value of morbidity risk reductions for both microbial contaminants and cancer. In addition, the value of reducing cancer risks versus microbial risks in a public context is revealed. Our results suggest that reducing mortality risks from microbial illness has greater value than reducing mortality risks from cancer. Similarly, overall microbial risk-reductions programs (mortality and morbidity) have higher value than cancer risk-reduction programs in this context. In addition, we provide separate estimates of the value of statistical life associated with cancer and microbial risks, in a public context, and the value of statistical illness cases associated with these two risks.