else, such as an accidental death. Third, how does WTP for a reduced risk compare between a risk reduction experienced now versus later? Fourth, are there competing risks (e.g., Eeckhoudt and Hammitt, 2001; Evans and Smith, 2006)? If a person thinks that a particular risk is a very small portion of the overall risk of dying, they may not be willing to pay as much to reduce that risk. Or, if a person thinks that a particular risk is not within their control (e.g., cardiovascular disease associated with exposure to air pollution, as opposed to cardiovascular disease associated with diet), his or her WTP may be different to reduce that same risk. Fifth, are there public programs in place to make it easier for private behavior to reduce a risk, which has been shown in theory to influence WTP (Shogren, 1990)? Finally, when thinking about risk, most people don’t just think about the probability of the adverse event. They also think about a number of other attributes that can impact WTP for the same risk reduction (the immediacy of the effect, future generations, etc.) (Slovic, 1987).
Although the focus of her presentation was on health, Alberini said there are several approaches to valuing environmental effects. Economists favor what is known as the damage function approach, which involves quantifying the physical effects and then attaching a value to those effects. In addition to the methods discussed above, the monetary value of the effects can also be estimated using the travel cost method (a method that infers the value people place on visiting some site, generally for recreational purposes), the hedonic housing price method, and stated preference and other stated preference methods. Some of these methods are well suited to estimating the effects of food production practices on ecological systems, but do not lend themselves to valuing the human health effects of food production practices or safety levels.
In conclusion, Alberini encouraged valuation of the health and environmental effects of food production, but emphasized that a single valuation exercise is unlikely to be sufficient. Different effects will likely require different methods. “We are probably better off dividing up the chore into different tasks and facing them separately,” she explained.
In the question-and-answer period following her presentation, Alberini remarked that WTP includes ability to pay. That is, people are willing to pay only what they can pay. She also mentioned that altruism is another understudied topic, that is, the willingness to pay for other people. She mentioned current focus group research on altruism being conducted by the EPA and other scientists.