Altruism and Environmental Risks to Health of Parents and their Children
- Presenter:
Chair: TBA; Discussant: Allen Goodman Mon June 5, 2006 15:30-17:00 Room 326
Special protection of young children from environmental hazards has become a worldwide priority of government policies to improve human health. The fundamental tension between parental altruism and self-interest looms as the crucial behavioral factor determining the effectiveness of these policies. This paper tests altruism in a unique field experiment by estimating marginal rates of substitution between skin cancer risks faced by 488 parents and their children between the ages of 3 and 12 years. Tests are guided by a reformulation of a standard model of altruistic family behavior that incorporates household production of latent health risk. The model demonstrates that while the marginal rate of substitution between parent consumption and child consumption of market goods is equal to unity, the marginal rate of substitution between risks faced by the parent and child is equal to the ratio of marginal risk reduction costs. Econometric estimates presented support the altruism hypothesis.
