The effect of risk characteristics on the willingness to pay for mortality risk reductions from electric power generation

Kenshi Itaoka, Aya Saito, Alan Krupnick, Wiktor Adamowicz, Taketoshi Taniguchi

Research output: Contribution to journalArticle

26 Citations (Scopus)

Abstract

The objective of this study is to estimate willingness to pay (WTP) for the reduction of mortality risks caused by fossil fuel (natural gas, coal and oil) versus nuclear electric power generation systems and to examine the influence of risk characteristics involved with electric power generation on WTP. A choice experiment was conducted to achieve these objectives. The attributes for nuclear risks in the experiment included the probability of disasters and the expected losses if a disaster occurs. We find evidence of (i) a baseline effect (where WTP is sensitive to hypothetical versus actual baseline expected mortality); (ii) a 'labeling effect,' where, surprisingly, the term 'nuclear' has no effect on WTP, but the term 'fossil-fueled power generation' results in lower WTP; and (iii) disaster aversion, meaning that people focus on the conditional loss from a nuclear disaster, not the probability. We also find that the WTP for reducing deaths from a nuclear disaster is about 60 times the WTP for routine reducing fossil-fuel generation-related deaths.

Original languageEnglish
Pages (from-to)371-398
Number of pages28
JournalEnvironmental and Resource Economics
Volume33
Issue number3
DOIs
Publication statusPublished - Mar 1 2006
Externally publishedYes

Fingerprint

Electric power generation
mortality risk
willingness to pay
power generation
Disasters
disaster
Fossil fuels
fossil fuel
Labeling
Power generation
Natural gas
Experiments
Coal
effect
risk reduction
electric power
Risk characteristics
Mortality risk
Willingness-to-pay
Risk reduction

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

The effect of risk characteristics on the willingness to pay for mortality risk reductions from electric power generation. / Itaoka, Kenshi; Saito, Aya; Krupnick, Alan; Adamowicz, Wiktor; Taniguchi, Taketoshi.

In: Environmental and Resource Economics, Vol. 33, No. 3, 01.03.2006, p. 371-398.

Research output: Contribution to journalArticle

Itaoka, Kenshi ; Saito, Aya ; Krupnick, Alan ; Adamowicz, Wiktor ; Taniguchi, Taketoshi. / The effect of risk characteristics on the willingness to pay for mortality risk reductions from electric power generation. In: Environmental and Resource Economics. 2006 ; Vol. 33, No. 3. pp. 371-398.
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