Journal Title
Title of Journal: J Risk Uncertain
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Abbravation: Journal of Risk and Uncertainty
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Authors: W Kip Viscusi Joel Huber
Publish Date: 2011/12/28
Volume: 44, Issue: 1, Pages: 19-44
Abstract
The gap between willingnesstopay WTP and willingnesstoaccept WTA benefit values typifies situations in which reference points—and direction of movement from reference points—are consequential Why WTAWTP discrepancies arise is not well understood We generalize models of reference dependence to identify separate reference dependence effects for increases and decreases in environmental health risk probabilities for increases and decreases in costs and reference dependence effects embodying the interaction of two changes We estimate separate reference dependence effects for the four possible cost and health risk change combinations using data from our choicebased experiment for a nationally representative sample of 4745 households The WTAWTP gap is due largely to the reference dependence effects related to costs Standard models of reference dependence are not consistent with the results as there is an interactive effect Estimated income effects are under a penny and thus cannot account for higher values of WTA relative to WTPThe survey was administered by Knowledge Networks KN to members of the KN panel over the 2008–2009 period The KN panel is a probability sample of the US population People who do not have internet access are provided with computers or internet service to generate a representative sample The total survey length of this Webbased survey was under 25 min The survey response rate was 69
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