How do individuals value deaths associated with air pollution? A comparison of three hypothetical scenarios.

Summary [The economic valuation of a reduction in mortality risk is increasingly based on contingent valuation techniques. These techniques consist in asking a sample of individuals about their "willingness to pay" (WTP) to reduce this risk based on hypothetical scenarios. WTPs, however, depend on many factors, including the nature of the underlying risk and the scenario proposed to reduce it. This paper focuses on the reduction in mortality risk associated with exposure to air pollution and tests the effect of changing the hypothetical valuation context through three scenarios: a new drug, a move and new regulations. To analyze the WTPs reported in the different scenarios, we define a unified theoretical and then econometric framework of analysis that takes into account participants' preferences for the present, as well as those of other household members. Two results follow. The estimated implicit discount rates, specific to each of the hypothetical scenarios, turn out to be significantly different. The estimated implicit discount rates, specific to each of the hypothetical scenarios, are significantly different: around 7% for the "moving" scenario, 24% and 26% for the "drug" and "regulation" scenarios, respectively. This results in very different average "values of avoided death" (VED) between the "moving" scenario (801,000) on the one hand, and the "drug" (299,000) and "regulatory" (252,000) scenarios on the other.