The "value of a statistical life" (VSL) is shorthand for an important concept, but the term tends flummox people who are unfamiliar with it. The VSL actually measures people's "willingness to swap alternative goods and services for a tiny reduction in the chance of sudden death." The general public (and many politicians) would be less angry/alarmed/confused if we came up with a better shorthand. I also argue that economists' continual pursuit of a single number for "the" VSL is misguided and can be misleading.
We examine the sale prices of nearly 34,000 homes near sites in three metropolitan areas for up to a 30-year period. Our results are both surprising and inconsistent with most prior work. The principal result is that, when cleanup is delayed for 10, 15, and even up to 20 years, the discounted present value of the cleanup is mostly lost. A possible explanation for these property value losses is that the sites are stigmatized and the homes in the surrounding communities are shunned. The results suggest that expedited cleanup and minimizing the number of stigmatizing events would reduce these losses.
In hedonic property value models, economists typically assume that changing perceptions of environmental risk should be captured by changes in housing prices. For long-lived risks emanating from point sources, however, many other features of neighborhoods seem to change as well. Households relocate in response to changes in. perceived environmental quality. We consider spatial patterns in selected census variables over three decades in the vicinity of four Superfund sites. We find many examples of moving and staying behavior, inferred from changes in the relative concentrations of a wide range of socio-demographic groups in census tracts near the site versus farther away.
The luck of the draw in assigning the referendum thresholds on individual referendum contingent valuation questionnaires can produce a surprisingly wide variety of value estimates. We control for the behavioral biases that confound other comparison studies by using one sample of payment card CV data and simulating 200 samples of consistent referendum responses. Where referendum questions have produced different value estimates than other formats, elaborate explanations for the apparent discrepancies may not be necessary.
Medium- to long-run price elasticities of demand for water are higher than short-run studies suggest. We examine data from the Los Angeles Department of Water and Power's 1983 residential energy survey. Households' decisions to install shower retrofit devices are influenced by the potential to save money on water heating bills. We attribute toilet retrofit decisions more to noneconomic factors which might be characterized as “general conservation mindedness.”
Closed-ended contingent valuation surveys can be very useful in the evaluation of non-market resources. Respondents merely state whether they would accept or reject a hypothetical threshold amount, either as payment for giving up access to the resource, or as a fee for its use. We develop a maximum likelihood procedure which exploits the variation in the threshold values to allow direct and separate point estimates of regression-like slope coefficients and error standard deviations (without truncation bias). Our illustration uses data from a survey of recreational fishermen to examine factors which influence individuals' willingness-to-pay.