Value of Statistical Life and Cause of Accident: A Choice Experiment

The purpose of this study is to compare the value of statistical life (VSL) estimates for traffic, drowning, and fire accidents. Using a choice experiment in a mail survey of 5,000 Swedish respondents we estimated the willingness to pay for risk reductions in the three accidents. In the experiment respondents were asked a series of questions, whether they would choose risk reducing investments where type of accident, cost of the investment, the risk reduction acquired, and the baseline risk varied between questions. The VSLs for fire and drowning accidents were found to be about 1/3 lower than that for traffic accidents. Although respondents worry more about traffic accidents, this alone cannot explain the difference in VSL estimates. The difference between fire and drowning accidents was not found to be statistically significant.     

Altruistic and Private Values For Saving Lives With an Oyster Consumption Safety Program

We use data from an Internet-based survey and estimate the benefits of an oyster consumption safety policy with the contingent valuation method. In addition to providing a context-specific estimate of willingness-to-pay for oyster safety, we consider an important issue in the contingent valuation mortality risk reduction literature. A number of studies find that willingness-to-pay for mortality risk reduction is not sensitive to the scope of the risk change. We present the scope test as a difference in the number of lives saved by the program, instead of small changes in risk, and find that referendum votes are responsive to scope. A third feature of this article is that we identify those at-risk respondents who would most benefit from the policy and decompose willingness-to-pay into use values and altruistic nonuse values. We find that willingness-to-pay per life saved ranges from $3.95 million to $7.69 million for the private good of lives saved when the respondent is at risk (i.e., use values). Willingness-to-pay per life saved including both use and altruistic nonuse values ranges from $6.89 million to $12.87 million.     

Of Disasters and Dragon Kings: A Statistical Analysis of Nuclear Power Incidents and Accidents

We perform a statistical study of risk in nuclear energy systems. This study provides and analyzes a data set that is twice the size of the previous best data set on nuclear incidents and accidents, comparing three measures of severity: the industry standard International Nuclear Event Scale, the Nuclear Accident Magnitude Scale of radiation release, and cost in U.S. dollars. The rate of nuclear accidents with cost above 20 MM 2013 USD, per reactor per year, has decreased from the 1970s until the present time. Along the way, the rate dropped significantly after Chernobyl (April 1986) and is expected to be roughly stable around a level of 0.003, suggesting an average of just over one event per year across the current global fleet. The distribution of costs appears to have changed following the Three Mile Island major accident (March 1979). The median cost became approximately 3.5 times smaller, but an extremely heavy tail emerged, being well described by a Pareto distribution with parameter α = 0.5–0.6. For instance, the cost of the two largest events, Chernobyl and Fukushima (March 2011), is equal to nearly five times the sum of the 173 other events. We also document a significant runaway disaster regime in both radiation release and cost data, which we associate with the “dragon‐king” phenomenon. Since the major accident at Fukushima (March 2011) occurred recently, we are unable to quantify an impact of the industry response to this disaster. Excluding such improvements, in terms of costs, our range of models suggests that there is presently a 50% chance that (i) a Fukushima event (or larger) occurs every 60–150 years, and (ii) that a Three Mile Island event (or larger) occurs every 10–20 years. Further—even assuming that it is no longer possible to suffer an event more costly than Chernobyl or Fukushima—the expected annual cost and its standard error bracket the cost of a new plant. This highlights the importance of improvements not only immediately following Fukushima, but also deeper improvements to effectively exclude the possibility of “dragon‐king” disasters. Finally, we find that the International Nuclear Event Scale (INES) is inconsistent in terms of both cost and radiation released. To be consistent with cost data, the Chernobyl and Fukushima disasters would need to have between an INES level of 10 and 11, rather than the maximum of 7.     

Who Would Be Willing to Accept Disaster Debris in Their Backyard? Investigating the Determinants of Public Attitudes in Post‐Fukushima Japan

In the wake of the 2011 Great East Japan Earthquake and tsunami, the Ministry of Environment in Japan asked municipalities nationwide to accept and treat disaster waste. This call for cross‐jurisdictional waste treatment provoked considerable public controversy. To explore how the national and municipal governments can seek more public acceptance in the wake of future disasters, this study implemented a nationwide survey and addressed the question of what factors influence the public's willingness to support their municipalities’ plans to host disaster waste. Three strands of the literature—on risk perception, public dissent, and prosocial behavior—offer valuable insights into hypothesis building, although none has addressed the above question. Estimates from an ordered logistic regression (N = 1,063) reveal that the conditions of a nuclear accident and living with a small child in the household would lower the level of support for accepting disaster waste, although this does not mean that people would give their support in the absence of a nuclear accident. The results also suggest that the national and municipal governments should communicate more with the public about the risks, benefits, and costs associated with hosting disaster debris, and make efforts to improve public trust in the national government.     

Policy Incentives for Dangerous (But Necessary) Operations

In industries where firms perform dangerous (but necessary) operations, liability costs—due to potential harm to third parties—can be significant. Firms may therefore find it optimal to exit the market, and this may lead to an inefficiently low number of incumbents. A social planner can discourage exit by offering appropriately designed subsidies. Ex ante subsidies defray the costs associated with making operations safer (e.g., funds to subsidize the purchase of safety equipment). Ex post subsidies mitigate the financial damages caused by an accident (e.g., funds to defray the cost of cleaning up a toxic spill). We consider a model where (i) firms have private information about their ability to improve reliability and (ii) reliability investments are unobservable. We demonstrate that when the social value of reliability outweighs the benefit of increased competition, it is optimal to offer ex ante subsidies alone (i.e., to subsidize the cost of making operations safer). Conversely, when the benefits of competition outweigh the benefits of reliability, a combination of ex ante and ex post subsidies is optimal (i.e., not only to subsidize safer operations, but also to share the costs of a potential accident).     

Uncertainty Assessment in the Quantification of Risk Rates of Occupational Accidents

Occupational risk rates per hour of exposure have been quantified for 63 occupational accident types for the Dutch working population. Data were obtained from the analysis of more than 9,000 accidents that occurred over a period of six years in the Netherlands and resulted in three types of reportable consequences under Dutch law: (a) fatal injury, (b) permanent injury, and (c) serious recoverable injury requiring at least one day of hospitalization. A Bayesian uncertainty assessment on the value of the risk rates has been performed. Annual risks for each of the 63 occupational accident types have been calculated, including the variability in the annual exposure of the working population to the corresponding hazards. The suitability of three risk measures—individual risk rates, individual annual risk, and number of accidents—is examined and discussed.     

Cost-Benefit Analysis of All-Terrain Vehicles at the CPSC1

The present value of the costs of injuries and deaths associated with each unit of a product is a useful number in conducting cost-benefit analysis at the CPSC. Before a remedy is known, this value indicates the approximate amount that it is worth spending on a fix; similarly, if a fix is proposed, this number indicates whether it is cost-justified. The method of analysis is applied to all-terrain vehicles. Injury costs per vehicle are estimated. Determinants of accidents are estimated using a logit regression model applied to surveys of users and of accident victims; this indicates factors associated with accidents, and is used to estimate marginal probabilities. Costs of various vehicle components are estimated using a hedonic price index. This information (injury costs, accident probabilities, and component cost) is combined in a benefit–cost analysis of proposed remedies.     

Psychosocial variables related to transit safety: The application of catastrophe theory

This research applied a paradigm for the study of occupational safety and health risks in manufacturing settings to the risks associated with urban and regional transit operation. Subjects were 290 transit operators who completed a questionnaire measuring safety management, danger ratings, beliefs about accident control, work experience, physical stress, social stress, anxiety, environmental hazards, transit hazards (assaults and insults upon the operator, the need to reprimand passengers for various infractions, etc.), vehicle crashes and operator injuries, and alcohol and drug use. Principal findings were that operator injuries were most closely associated with transit hazards, which were more frequent at night and on the least desirable routes. Injuries occurred in a climate of elevated stress and anxiety which may have hampered the operators' ability to respond effectively to potentially dangerous situations. The cusp catastrophe model provided a non-linear dynamic explanation for accident occurrence and was more accurate (R = 0.71) for modelling accident incidence than the next best linear alternative (R = 0.51).     

Risk Analysis of the Vessel Traffic in the Strait of Istanbul

The Strait of Istanbul, the narrow waterway separating Europe from Asia, holds a strategic importance in maritime transportation as it links the Black Sea to the Mediterranean. It is considered as one of the world's most congested and difficult-to-navigate waterways. Over 55,000 transit vessels pass through the Strait annually, roughly 20% of which carry dangerous cargo. In this study, we have analyzed safety risks pertaining to transit vessel maritime traffic in the Strait of Istanbul and proposed ways to mitigate them. Safety risk analysis was performed by incorporating a probabilistic accident risk model into the simulation model. A mathematical risk model was developed based on probabilistic arguments regarding instigators, situations, accidents, consequences, and historical data, as well as subject-matter expert opinions. Scenario analysis was carried out to study the behavior of the accident risks, with respect to changes in the surrounding geographical, meteorological, and traffic conditions. Our numerical investigations suggested some significant policy indications. Local traffic density and pilotage turned out to be two main factors affecting the risks at the Strait of Istanbul. Results further indicate that scheduling changes to allow more vessels into the Strait will increase risks to extreme levels. Conversely, scheduling policy changes that are opted to reduce risks may cause major increases in average vessel waiting times. This in turn signifies that the current operations at the Strait of Istanbul have reached a critical level beyond which both risks and vessel delays are unacceptable.     

Seeing is Believing? An Examination of Perceptions of Local Weather Conditions and Climate Change Among Residents in the U.S. Gulf Coast

What role do objective weather conditions play in coastal residents’ perceptions of local climate shifts and how do these perceptions affect attitudes toward climate change? While scholars have increasingly investigated the role of weather and climate conditions on climate‐related attitudes and behaviors, they typically assume that residents accurately perceive shifts in local climate patterns. We directly test this assumption using the largest and most comprehensive survey of Gulf Coast residents conducted to date supplemented with monthly temperature data from the U.S. Historical Climatology Network and extreme weather events data from National Climatic Data Center. We find objective conditions have limited explanatory power in determining perceptions of local climate patterns. Only the 15‐ and 19‐year hurricane trends and decadal summer temperature trend have some effects on perceptions of these weather conditions, while the decadal trend of total number of extreme weather events and 15‐ and 19‐year winter temperature trends are correlated with belief in climate change. Partisan affiliation, in contrast, plays a powerful role affecting individual perceptions of changing patterns of air temperatures, flooding, droughts, and hurricanes, as well as belief in the existence of climate change and concern for future consequences. At least when it comes to changing local conditions, “seeing is not believing.” Political orientations rather than local conditions drive perceptions of local weather conditions and these perceptions—rather than objectively measured weather conditions—influence climate‐related attitudes.     

Multi‐Exposure Pathway Model to Compare Escherichia coli O157 Risks and Interventions

The relative contributions of exposure pathways associated with cattle‐manure‐borne Escherichia coli O157:H7 on public health have yet to be fully characterized. A stochastic, quantitative microbial risk assessment (QMRA) model was developed to describe a hypothetical cattle farm in order to compare the relative importance of five routes of exposure, including aquatic recreation downstream of the farm, consumption of contaminated ground beef processed with limited interventions, consumption of leafy greens, direct animal contact, and the recreational use of a cattle pasture. To accommodate diverse environmental and hydrological pathways, existing QMRAs were integrated with novel and simplistic climate and field‐level submodels. The model indicated that direct animal contact presents the greatest risk of illness per exposure event during the high pathogen shedding period. However, when accounting for the frequency of exposure, using a high‐risk exposure‐receptor profile, consumption of ground beef was associated with the greatest risk of illness. Additionally, the model was used to evaluate the efficacy of hypothetical interventions affecting one or more exposure routes; concurrent evaluation of multiple routes allowed for the assessment of the combined effect of preharvest interventions across exposure pathways—which may have been previously underestimated—as well as the assessment of the effect of additional downstream interventions. This analysis represents a step towards a full evaluation of the risks associated with multiple exposure pathways; future incorporation of variability associated with environmental parameters and human behaviors would allow for a comprehensive assessment of the relative contribution of exposure pathways at the population level.     

Technological alliance portfolio configuration and firm performance

Firms pursuing technological alliances to gain competitive advantages have become a ubiquitous phenomenon in today’s business environment. This article examines which technological alliance portfolio configuration is better for focal firm performance using a portfolio rather than a dyadic perspective. To assess technological alliance portfolio effects on Korean pharmaceutical and biotechnology firms, we adopted three explanatory variables—number of alliances, number of partners, and spanning structural holes. The growth rate of revenue and the growth rate of profit are used as dependent variables. We identify two characteristics of technological alliance portfolios from the two-step generalized method of moments estimates. First, we find that between two firms with the same number of alliances, the firm with the larger number of partners would have a better performance. This result is unlike those in previous studies because it distinguishes between the number of alliances and number of partners based on the network theory. Second, we find that spanning structural holes affects firm performance rather like a double-edge sword—it positively affects the growth rate of profit but negatively affects the growth rate of revenue of firms. In short, spanning structural holes is simultaneously beneficial for firm profitability and unfavorable for firm growth. This result differs from those of earlier studies because it shows that a firm spanning structural holes among alliance partners produces either a positive or a negative effect, suggesting that a firm should vary its strategy depending on whether it prioritizes profitability or growth.     

DIFFUSING KNOWLEDGE WHILE SPREADING GOD'S MESSAGE: PROTESTANTISM AND ECONOMIC PROSPERITY IN CHINA, 1840–1920

We provide an account of how Protestantism promoted economic prosperity in China—a country in which Protestant missionaries penetrated far and wide during 1840–1920, but only a tiny fraction of the population had converted to Christianity. By exploiting the spatial variation in the missionaries’ retreat due to the Boxer Uprising to identify the diffusion of Protestantism, we find that the conversion of an additional communicant per 10,000 people increases the overall urbanization rate by 18.8% when evaluated at the mean. Moreover, 90% of this effect comes from knowledge diffusion activities associated with schools and hospitals erected by the missionaries. (JEL: N35, Z12, O18)     

Female Labor Supply,Human Capital,and Welfare Reform

We estimate a dynamic model of employment, human capital accumulation—including education, and savings for women in the United Kingdom, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer‐term effects of policy, increase with education, but experience mainly accumulates when in full‐time employment. Tax credits are welfare improving in the U.K., increase lone‐mother labor supply and marginally reduce educational attainment, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts.     

Offenders’ Risk‐Taking Attitude Inside and Outside the Prison Walls

It has long been assumed that risk taking is closely associated with criminal behavior. One reason for placing criminals behind bars—aside from punishment and protecting the public—is to prevent them from engaging in further risky criminal activities. Limited attention has been paid to whether being inside or outside prison affects offenders’ risk‐taking behaviors and attitudes. We compared risk‐taking behaviors and attitudes in five risk domains (ethical, financial, health/safety, recreational, social) among 75 incarcerated offenders (i.e., offenders who are currently in prison) and 45 ex‐offenders (i.e., offenders who have just been released from prison). Ex‐offenders reported higher likelihood of engaging in risky behavior, driven largely by a willingness to take more risks in the recreational and ethical domains. Benefits attributed to risk taking as well as risk perception did not differ between incarcerated and ex‐offenders, indicating that the opportunity to take risks might underlie behavioral risk intentions. Our results also indicate that risk‐taking activities are better predicted by the expected benefits rather than by risk perception, aside from the health/safety domain. These results highlight the importance of studying the person and the environment and examining risk taking in a number of content domains.     

DO SUBSIDIES INCREASE CHARITABLE GIVING IN THE LONG RUN? MATCHING DONATIONS IN A FIELD EXPERIMENT

Subsidizing charitable giving—for example, for victims of natural disasters—is very popular, not only with governments but also with private organizations. Many companies match their employees' charitable contributions, hoping that this will foster the willingness to contribute. However, systematic analyses of the effect of such a matching mechanism are still lacking. This article tests the effect of matching charitable giving in a randomized field experiment in the short and the long run. The donations of a randomly selected group were matched by contributions from an anonymous donor. The results support the hypothesis that a matching mechanism increases contributions to a public good. However, in the periods after the experiment, when matching donations have been stopped, the contribution rate declines for the treatment group. The matching mechanism leads to a negative net effect on the participation rate. The field experiment therefore provides evidence suggesting that the willingness to contribute may be undermined by a matching mechanism in the long run. (JEL: C93, D64, H00)     

Perceptions of Recreational Fishing Boat Captains: Knowledge and Effects of Fish Consumption Advisories

The impacts of fish consumption advisories on recreational and subsistence fishing, particularly in fresh waters, have been examined extensively. By contrast, little attention has focused on organized recreational fishing, such as from party and charter boats, and particularly for salt water fish. We interviewed 93 New Jersey boat captains to determine their knowledge about fish consumption advisories, and whether, in their opinion, clients knew of fish consumption advisories, and whether they thought advisories had an effect on recreational fishing and their businesses. Advisories were ranked by captains as a moderate influence on the success of their business, less so than number of fish caught, strength of the economy, overfishing by commercial boats, and management regulations. Only one boat captain had not heard warnings about eating fish, but what captains said they had heard was mixed in its accuracy and completeness. Clients expect captains to know about fish, and about half of boat captains said clients had asked about the safety of eating fish. Captains who felt advisories were affecting their businesses tended to fish for species without high levels of mercury (except for bluefish) or PCBs, the primary contaminants of concern for state advisories and federal advice. However, these captains worked closer to areas (e.g., Raritan Bay complex and New York Harbor) subject to advisories than did other captains, and were more prone to say that management regulations (e.g., fish size, creel limits, seasons) and marketing and advertising by the industry or state were strong influences on the success of their seasons. Comparing captains who thought advisories had some or great effect (60%) versus those reporting "no effect" (40%), there was no difference in the mean percentage of trips targeting high mercury species such as swordfish and shark. Many captains said they would or might post advisories, but 42% of the boat captains said they would not post consumption warnings if the state provided them. The significant portion (at least 15%) of saltwater fishing supported by these businesses suggests that these captains are an important conduit for future risk communication.     

Management Errors and System Reliability: A Probabilistic Approach and Application to Offshore Platforms

Probabilistic risk analysis, based on the identification of failure modes, points to technical malfunctions and operator errors that can be direct causes of system failure. Yet component failures and operator errors are often rooted in management decisions and organizational factors. Extending the analysis to identify these factors allows more effective risk management strategies. It also permits a more realistic assessment of the overall failure probability. An implicit assumption that is often made in PRA is that, on the whole, the system has been designed according to specified norms and constructed as designed. Such an analysis tends to overemphasize scenarios in which the system fails because it is subjected to a much higher load than those for which it was designed. In this article, we find that, for the case of jacket-type offshore platforms, this class of scenarios contributes only about 5% of the failure probability. We link the PRA inputs to decisions and errors during the three phases of design, construction, and operation of platforms, and we assess the contribution of different types of error scenarios to the overall probability of platform failure. We compute the benefits of improving the design review, and we find that, given the costs involved, improving the review process is a more efficient way to increase system safety than reinforcing the structure.     

False Alarms and Missed Events: The Impact and Origins of Perceived Inaccuracy in Tornado Warning Systems

Theory and conventional wisdom suggest that errors undermine the credibility of tornado warning systems and thus decrease the probability that individuals will comply (i.e., engage in protective action) when future warnings are issued. Unfortunately, empirical research on the influence of warning system accuracy on public responses to tornado warnings is incomplete and inconclusive. This study adds to existing research by analyzing two sets of relationships. First, we assess the relationship between perceptions of accuracy, credibility, and warning response. Using data collected via a large regional survey, we find that trust in the National Weather Service (NWS; the agency responsible for issuing tornado warnings) increases the likelihood that an individual will opt for protective action when responding to a hypothetical warning. More importantly, we find that subjective perceptions of warning system accuracy are, as theory suggests, systematically related to trust in the NWS and (by extension) stated responses to future warnings. The second half of the study matches survey data against NWS warning and event archives to investigate a critical follow‐up question—Why do some people perceive that their warning system is accurate, whereas others perceive that their system is error prone? We find that subjective perceptions are—in part—a function of objective experience, knowledge, and demographic characteristics. When considered in tandem, these findings support the proposition that errors influence perceptions about the accuracy of warning systems, which in turn impact the credibility that people assign to information provided by systems and, ultimately, public decisions about how to respond when warnings are issued.