WEAI/AERE 2009 - Individual Paper Abstract
Title: Willingness to Pay for Small Reductions in Morbidity and Mortality Risks: Canada and the United States
Author(s): Peter STIFFLER, Trudy Ann Cameron, University of Oregon; J.R. DeShazo, UCLA (photo credit: Toronto waterfront, Peter Stiffler)
Abstract: Benefit-cost analysis of environmental policies frequently requires estimates of the social benefit associated with human health improvements. We assess differences between Canadian and US individuals' willingness to pay (WTP) for health risk reductions using a large stated preference survey conducted across both countries. Our utility-theoretic choice model allows different and systematically varying marginal utilities for avoided future time in different adverse health states (illness years, recovered/remission years, and lost life years). We find significant differences between Canadian and US preferences, and WTP also differs systematically with age, gender, education, and marital status, as well as a number of attitudinal and subjective health-perception variables. To permit comparison with conventional estimates of the "value of a statistical life," we focus on the special case of WTP to avoid sudden death in the current period. Age profiles for WTP are markedly different across the two countries. Canadians tend to display substantially flatter age profiles, with peak WTP realized at older ages. In some cases, differences in WTP between Canada and the US disappear for Canadians who have prior experience with going outside of their provincial health plan for medical diagnostic tests.