Paying for Safety: Voluntary Reduction of Residential Radon Risks

Abstract

identify radon as a public health problem, to sponsor widespread testing, and to develop reliable, low-cost techniques for reducing indoor exposure levels. Data recently collected in Sweden make it possible to derive the first empirical estimates of homeowner willingness to pay to reduce radon health risks. This paper reports these estimates and discusses their implication for public policy. We conclude that the low value of estimated willingness to pay indicates that homeowners may have interpreted the technology-based recommended exposure as a safety threshold. After reviewing the nature and regulatory history of the radon hazard, we present a theoretical framework for modeling the value of reduced radon risk. The model employs a conventional state-dependent utility function associated with a discrete decision to mitigate or not to mitigate. In subsequent sections we describe the data collected from a sample of homeowners participating in a health department testing program and report parameter estimates from a binomial logit analysis. The estimated parameters form the basis for calculations of the probability of mitigating and willingness to pay for mitigation at various exposure levels and for various household characteristics.