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The Market Value Of Reducing Cancer Risk: Hedonic Housing Prices With Changing Information, W. Kip Viscusi, Ted Gayer, James T. Hamilton
The Market Value Of Reducing Cancer Risk: Hedonic Housing Prices With Changing Information, W. Kip Viscusi, Ted Gayer, James T. Hamilton
Vanderbilt Law School Faculty Publications
In this paper, we use housing price changes occurring after the release of a regulatory agency's environmental risk information to estimate the value people place on cancer risk reduction. Using a large original data set on the repeat sales of houses, matched with detailed data on hazardous waste cancer risk and newspaper publicity, we find that housing prices respond in a rational manner to changes in information about risk. Since the new information indicated that the sites in our sample pose relatively low cancer risk, the informational release led residents to lower their risk beliefs, resulting in an average housing …
Do Smokers Underestimate Risks?, W. Kip Viscusi
Do Smokers Underestimate Risks?, W. Kip Viscusi
Vanderbilt Law School Faculty Publications
This paper uses a national survey of 3,119 individuals to examine the effect of lung cancer risk perceptions on smoking activity. Both smokers and nonsmokers greatly overestimate the lung cancer risk of cigarette smoking, and the extent of the overestimation is much greater than the extent of underestimation. These risk perceptions in turn significantly reduce the probability of smoking, as suggested by an economic model of risky consumption decisions. Cigarette excise taxes in effect endow individuals with additional risk perceptions comparable to their current assessed lung cancer risks