Willingness to pay for health risk reduction in the context of altruism

Abstract

This paper presents results on the valuation of health risks in the presence of altruism. The contingent valuation method is utilised in a split sample experiment for estimating the private and public values in reducing the risk of flu. Data modelling for the dichotomous choice method follows a Bayesian approach, which accounts for zero responses and is adequate for the comparison of small sample results. The results of the experiment suggest that altruism is a positive component in the value of reducing the probability of flu, which depends positively on the number of days involved, the health status and the personal income of the subject. The marginal value of risk is found to be a decreasing function of the reduction in the probability of becoming ill.