A theoretically-consistent empirical model of non-expected utility: An application to nuclear-waste transport Academic Article uri icon

abstract

  • Few theoretically-consistent empirical models addressing the relationship between ambiguity, risk, and preferences for health and safety exist. To fill this gap, we propose a theoretical non-expected-utility model (NEUM) that is relatively easy to estimate using an interval-data model. The NEUM we develop hinges upon two sources of variability, one over risk and the other over ambiguity about the risk. Using data from a survey of Nevada residents concerning risks from nuclear-waste transport, we provide individual-specific welfare estimate for a risk increase. Our findings suggest that negative externalities from nuclear-waste transport perceived risks and ambiguity may be substantial. © Springer Science + Business Media, LLC 2006.

author list (cited authors)

  • Riddel, M., & Shaw, W. D.

citation count

  • 43

publication date

  • March 2006