A comparison of economic valuation methods for environmental health risk reduction, assessing residential radon mitigation in Manitoba

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Spiegel, Jerry M.
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'Statement of the problem'. This study investigates the implications and usefulness of different methods to measure the economic value of reducing risk by examining homeowners' responses to the risk of lung cancer attributable to residential radon exposure in Manitoba, a province with relatively high exposure levels. The following specific hypotheses were tested: (1) There is a positive individual willingness to pay for radon reduction. (2) There is a positive association between the level of awareness of risk (and its mitigation) and the decision to reduce radon risk. (3) What people pay is less than what they say they would. 'Research design and methods'. Using a data set of 4,448 households with known radon exposure, 1200 randomly selected homeowners were surveyed to document actions taken to reduce risk from various environmental health hazards, including radon. The 507 respondents were then re-surveyed by a contingent valuation mail questionnaire to ascertain their willing to pay to reduce radon exposure. 'Results'. Logistic regression analysis indicated that individuals were willing to pay $2.21 per Bq/m3 reduction. Those who felt that their health had been affected by environmental factors were over twice as likely to both have spent money to reduce radon risk and to express a positive WTP bid. Although the Canadian guideline recommends that individuals act to reduce risk at residential radon exposure levels above 800 Bq/m3, individuals were only likely to act at exposure levels exceeding 1, 100 Bq/m3. Respondents presented with background information on the health risk as part of the contingent valuation questioning protocol, however, indicated they were prepared to act to reduce risk at exposure levels just over 700 Bq/m3. 'Conclusions'. The Canadian guideline, as it has been implemented, has failed to appropriately guide health protection behaviour. Conducting a follow-up study in a population whose exposure had been recorded as part of an earlier investigation offers an excellent way to cost-effectively examine how individuals respond to risk. A protective stage model of the steps that can be taken to reduce risk provides an excellent tool to determine the factors that apply at different stages. Valuation methodologies are still in early development; additional research sensitive to the needs of policy makers can help establish standard methods and protocols.